Nogger's Blog

30/05/13 -- Soycomplex: Beans were mixed, with new crop gaining on old crop. There's some talk that the late maturity of the US wheat crop will push back harvesting, thereby reducing some planned double cropping with follow-on soybeans acres. Widespread wet weather in the Midwest continues to disrupt planting of both corn and soybeans. MDA CropCast raised slightly their 2013 US soybean production estimate due to a shift in plantings out of corn. They now estimate the 2013 crop at 84.94 MMT, up 11.7% on last year. They have the 2013/14 world soybean crop up 7% to 265.54 MMT, with output in Argentina up from this year's 48.5 MMT to 54.0 MMT and Brazil's crop rising from 81.4 MMT to 83.0 MMT. They have the world oilseed rape crop up 5.5% to 59.0 MMT, led by an increase of 9.2% in Canada to 14.63 MMT. There's talk of China cancelling more old crop soybeans, in addition to the 147 TMT that was confirmed by the USDA yesterday. There's also talk of Brazilian cargoes getting cancelled/deferred. Nevertheless the USDA announced 120 TMT of new crop US beans sold to China. USD15/bu on beans and USD450 on meal are looking like difficult levels to break above and hold. Trade expectations for tomorrow's delayed weekly export sales report for beans are 300-800 MT. Jul 13 Soybeans closed at USD14.95 3/4, down 6 cents; Nov 13 Soybeans closed at USD12.89 1/4, up 3/4 cent; Jul 13 Soybean Meal closed at USD440.80, down USD3.50; Jul 13 Soybean Oil closed at 48.58, down 5 points.

Corn: Corn also saw new crop gain on old crop, although both ultimately closed lower. Weekly US ethanol production fell 12,000 barrels/day to 863,000 bpd. South Korea's NOFI bought 68 TMT of optional origin corn for October shipment. MDA CropCast trimmed their US 2013 corn production forecast by a modest 0.6 MMT from last week to 338.6 MMT, which is still an increase of more than 30% on last year. "Rains increased across west central areas this past week, which resulted in some wetness especially in Iowa and northwestern Illinois. Rains should remain abundant over the next few days across much of the corn belt, but should ease a bit this weekend and early next week before returning mid and late next week again. The rains will maintain abundant moisture for germination and early growth, but will slow any remaining planting," they said. Various banks are lining up to project lower corn prices by the end of the year following the anticipated sharply higher US production. Macquaire today said prices could fall to USD4/bu, although maybe not until 2014. Optimism is high for a large, if delayed, US corn crop this year they said. Elsewhere MDA CropCast see Brazil's 2012/13 corn crop at 74.9 MMT and Argentina's at 23.1 MMT. Ukraine meanwhile will harvest a record corn crop of 25.3 MMT this year, they project, up more than 22% on last year. Europe's corn crop will rise 7% to 58.0 MMT, they forecast. Trade estimates for tomorrow's weekly export sales report from the USDA are 500-800 TMT. Jul 13 Corn closed at USD6.54 1/4, down 10 3/4 cents; Dec 13 Corn closed at USD5.62 3/4, down 3 cents.

Wheat: Wheat closed down, but well off early lows which were triggered by news that GMO wheat had been found growing in a field in Oregon. That immediately prompted Japan to announce that it was suspending purchases of US western white wheat and feed wheat. They did buy 117 TMT of a mixture of US and Canadian wheat in a tender, but the planned purchase of 25 TMT of of western white US wheat was scrapped. Recent Chinese wheat purchases from the US have been supporting the market, if they too decide to back away from buying US wheat, or even worse cancel some of the existing purchases, then that would undoubtedly send US prices lower. "Rains favoured eastern and southern portions of the Plains wheat belt this past week, which further improved moisture there for the crop as it pushes through heading. Additional improvements are expected there this week. However, dryness will continue to build across western areas," said MDA CropCast. They left their world wheat production estimate unchanged versus last week at 680.2 MMT, up 7% on last year. Large production increases are pencilled in for Russia, Ukraine, Kazakhstan, Argentina and Canada. Lebanon bought 25 TMT of German wheat for June shipment. Jordan retendered for 150 TMT of optional origin wheat and 100 TMT of optional origin barley. Bangladesh retendered for 50 TMT of optional origin wheat for June/July shipment. India’s STC tendered to sell 100 TMT of wheat for July shipment. Estimates for tomorrow's weekly export sales are 300-700 TMT. Jul 13 CBOT Wheat closed at USD6.98 3/4, down 4 cents; Jul 13 KCBT Wheat closed at USD7.46, down 1 3/4 cents; Jul 13 MGEX Wheat closed at USD8.15 1/2, down 1/4 cent.