Nogger's Blog

06/06/13 -- Soycomplex: Weekly soybean export sales of 48,400 MT of old crop and 589,900 MT of new crop were at the top end of trade expectations. The USDA's 2012/13 soybean export target has effectively been met with 99.7% on the books - the vast majority of it shipped already. Meal sales were above trade ideas at a combined 271,300 MT, and are now 102% of the USDA forecast. Whilst meal demand remains this strong the US crush will continue to be high, keeping old crop bean availability tight. Talk of Argentine meal having low protein levels this year could maintain demand for US material. There's also talk of an Argentine farmers strike coming up again soon. MDA CropCast raised their forecast for US soybean production this year to 85.16 MMT, up 13.3% on last year, due to acreage adjustments as more area is seen coming out of corn and into beans. "Rains were abundant across much of the soybean belt once again this past week, with heavy rains noted in southwestern portions of the Midwest. The rains continue to slow remaining planting, and are also resulting in some wetness and flooding. Additional rains are expected across the region this week, and should favour north central and northwestern Midwest crop areas. This will keep planting there quite slow," they said. They have the world 2013/14 crop at 265.76 MMT, up 7%. CONAB estimated the Brazilian 2012/13 soybean crop at 81.3 MMT versus a previous estimate of 81.5 MMT. They have 2012/13 bean exports estimated at 36.78 MMT, with meal exports at 14.93 MMT, both are unchanged from their previous estimates. CONAB said that in the Jan-May 2013 period Brazil has shipped 22.95 MMT of beans and 4.85 MMT of meal. Jul 13 Soybeans closed at USD15.27 1/4, down 4 3/4 cents; Nov 13 Soybeans closed at USD13.05 3/4, up 5 3/4 cents; Jul 13 Soybean Meal closed at USD454.00, down USD1.90; Jul 13 Soybean Oil closed at 48.16, down 14 points.

Corn: Weekly export sales for corn were disappointing at at 107,200 MT of old crop and only 51,600 MT of new crop, versus expectations of a net 5-800 TMT combined. Old crop commitments are now 89.1% of the USDA target for the season. Despite that, corn found support from the continuing planting problems in the US and the weak dollar. "Not too much has changed in the Midwest outlook. Showers have continued this morning and there's a rainy and cool Midwest forecast for the next 5 days," said Martell Crop Projections. Yesterday's news that the weekly ethanol grind was at the strongest pace in a year was also supportive. Corn used in last week’s production is estimated at 92.9 million bushels, although that's still below the 94.82 million bushels per week required to meet this crop year’s USDA estimate of 4.6 billion bushels of demand from the ethanol sector. MDA CropCast cut their forecast for US corn production this year by 1 MMT from last week to 337.6 MMT, although that's still a 30% increase on last year. The FAO/AMIS estimated the world corn crop at a record 963 MMT, although that's 3 MMT less than the USDA it's a 10.3% increase on last year. They pegged global ending stocks at 174 MMT, far higher than the USDA's 155 MMT, and up almost 29% on 2012/13. CONAB estimated the Brazilian total corn crop at 78.5 MMT versus previous estimate of 78.0 MMT, with second crop corn performing better than originally anticipated. They said that Brazil has shipped 6.73 MMT of corn this calendar year so far (Jan/May). Brazilian total 2012/13 corn exports were estimated at 15.0 MMT, unchanged from their previous estimate. Unconfirmed rumour from yesterday says that China may have bought up to 2.5 MMT of US new crop corn in the past few days. Jul 13 Corn closed at USD6.63 1/4, up 2 1/2 cents; Dec 13 Corn closed at USD5.48 1/4, up 6 cents.

Wheat: Weekly export sales for wheat were a combined 631,700 MT, slightly above trade expectations of 3-600 TMT. The report runs through to Thursday last week, which literally leaves one day of the US 2012/13 marketing year to be reported on next week. Cumulative shipments for 2012/13 stand at 26 MMT, with a further 1 MMT of sales remaining on the books unshipped. The USDA target for the season was 28 MMT, meaning that it looks like there will be around 2 MMT of extra beginning stocks to start off 2013/14. That will offset some of the anticipated 2013/14 shortfall in production. The US market is currently supported by these lower production prospects for this year. Winter wheat output is expected to be down, and spring wheat planting is way behind schedule. However, the BIG picture looks somewhat different. The FAO/AMIS today forecast a world wheat crop of a record 702 MMT in 2013/14, up 6.5% on last year, with ending stocks rising 5.5% to 173 MMT. Large production increases are expected from the usual discount sellers in the Black Sea. The USDA attaché in Moscow estimated the Russian 2013/14 grain crop at 91 MMT, up 28% on last year, with exports rising 50% to 24 MMT. Wheat production is seen at 53 MMT (+40.5%), with exports up 56% to 17 MMT. Japan bought 163,605 MT of it's usual mixture of US, Canadian and Australian wheat, but left US Western White wheat out of the equation following the recent GMO find. Jordan bought 100 TMT of optional origin wheat for September shipment at a level around USD70/tonne cheaper than current replacement levels from the US. With US wheat missing out into all but "traditional" homes once the Black Sea harvest kicks off a month from now, we could see US export sales drop off quite steeply in Q3 and Q4 of 2013. Jul 13 CBOT Wheat closed at USD6.97 3/4, down 3 3/4 cents; Jul 13 KCBT Wheat closed at USD7.38 1/2, down 4 3/4 cents; Jul 13 MGEX Wheat closed at USD8.20 1/4, up 4 1/4 cents.