Nogger's Blog

26/06/13 -- Soycomplex: The recent theme of steady nearby and a little bit weaker further forward continues. Oil World forecast global production of the 10 main oilseeds at 484.5 MMT in 2013/14, up 4.5% from 463.5 MMT a year ago. They estimated world oilmeal production in 2013/14 up 3% from 291 MMT to 300.3 MMT, of which soymeal production will rise 4.2% from 179.4 MMT to 186.9 MMT. They said that they therefore expect soymeal prices to fall in the second half of the year. Michael Cordonnier forecast the 2013 US soybean crop at 3.26 billion bushels versus a previous estimate of 3.22 billion. Lanworth Inc estimated the 2013 US soybean planted area at 78.0 million acres versus a previous estimate of 78.25 million. Trade estimates for tomorrow's weekly export sales for beans are between 100-400 TMT, with meal sales expected to come in at 50-150 TMT. Jul 13 Soybeans closed at USD15.34 1/4, up 9 cents; Nov 13 Soybeans closed at USD12.76, down 2 1/2 cents; Jul 13 Soybean Meal closed at USD463.30, up USD4.50; Jul 13 Soybean Oil closed at 46.63, down 51 points to the lowest level for a front month since October 2010.

Corn: The corn market was also firmer nearby and lower further forward. Tight deliverable stocks are supporting the nearby Jul 13 future ahead of first notice day. Weekly ethanol production data was supportive, up 12,000 barrels/day to 885,000 bpd - matching the high for the year so far. Michael Cordonnier estimated US corn yields this year at 153.0 bu/acre, with production at a record 13.26 billion bushels, both are unchanged from his previous estimates. Lanworth Inc forecast the 2013 US corn planted area at 95.7 million acres, up slightly from a previous estimate of 95.3 million. Argentina approved 16 MMT of new crop corn exports. China approved another 2 strains of GMO corn for import. Based on a Bloomberg survey China's 2013/14 corn imports will total 7 MMT, more than double those of a year ago. Reports of at least 10 MMT of this year's Chinese wheat crop being downgraded to only suitable for feed usage may have a negative impact on demand for corn however. CEC estimated South Africa 2013 corn crop at 11.375 MMT, down slightly on their previous forecast. Trade estimates for tomorrow's weekly export sales are 200-500 TMT. Jul 13 Corn closed at USD6.64 1/2, up 7 3/4 cents; Dec 13 Corn closed at USD5.44, down 1/2 cent.

Wheat: Unlike the other two main markets wheat was simply lower across the board on all three exchanges. Taiwan bought 120 TMT of Black Sea origin feed wheat for Aug/Sep shipment at USD274/tonne including freight. CNGOIC said that 10 MMT of wheat recently harvested in Henan province, the largest wheat producing area of China, may only be suitable for feed use due to rain damage. That's around a third of the total output of Henan and around 8% of the national crop. That could boost China's wheat imports in 2013/14, although that doesn't necessarily mean that the US will be picking up the business, especially in light of the recent GMO issues. US FOB wheat prices are currently around USD275-280/tonne. French wheat is around USD265/tonne FOB and Black Sea wheat is even cheaper. The Russian Grain Union said that this season's grain crop would come in lower than the official Ministry estimate of 95 MMT, without giving a specific figure. Rusagrotrans said production would be "not less than 97 MMT" - so take your pick. The latter have 2013/14 grain exports forecast very close to the USDA estimates at 17 MMT for wheat (the same as the USDA), 3.0 MMT for barley (versus 3.8 MMT from the USDA) and 2.5 MMT for corn (also the same as the USDA). Trade estimates for tomorrow's weekly export sales are 300-600 TMT. Jul 13 CBOT Wheat closed at USD6.67, down 8 3/4 cents; Jul 13 KCBT Wheat closed at USD6.94 1/4, down 10 cents; Jul 13 MGEX Wheat closed at USD7.99, down 10 1/4 cents.