Nogger's Blog

13/06/13 -- Soycomplex: The soybean market closed sharply lower for a second day, adding to yesterday's losses. Nearby beans bore the brunt as longs scrambled to exit the market despite old crop tightness. Weekly soybean export sales of 480,600 MT were mostly new crop (old crop accounted for only 33,500 MT of that total), in line with trade forecasts of 3-700 TMT. Meal sales were strong again at 97,700 MT of old crop and 47,100 MT of new crop, which should underpin demand for beans in the US. MDA CropCast estimated the US soybean crop at 3.129 billion bushels versus 3.39 billion from the USDA yesterday. World ending stocks for 2013/14 were estimated at 73.69 million by the USDA yesterday, as compared to 74.96 million tonnes in May. Chinese import demand was left at 69 MMT in 2013/14, up sharply from 59 MMT for the 2012/13 season. Taiwan bought 60 TMT of Brazilian beans for Aug/Sep shipment. The trade was a little surprised that the USDA didn't increase the 2013 soybean acreage yesterday, all eyes will now be on the June Plantings report due at the end of the month. Jul 13 Soybeans closed at USD15.10 1/4, down 30 1/2 cents; Nov 13 Soybeans closed at USD13.00 1/2, down 13 3/4 cents; Jul 13 Soybean Meal closed at USD452.60, down USD8.80; Jul 13 Soybean Oil closed at 47.84, down 27 points.

Corn: The corn market fell in follow through selling on yesterday's surprise from the USDA - leaving the 2013 US corn planted area unchanged at 97.3 million acres, contrary to expectations of a cut of around 1-3 million. However, it should be noted that the USDA have something of a track record of not lowering yield estimates in the June S&D report, usually waiting until July to do this. It may also be worth noting that they surprised the market last June by leaving US corn yields unchanged from their May projection at 166 bu/acre. In the July 2012 S&D report they then stunned the market by slashing fully 20 bu/acre off their June projection. MCA CropCast forecast the US 2013 corn crop at 13.291 billion bushels today, substantially lower than the USDA's estimate of just over 14 billion bushels yesterday. They estimated the world corn crop in 2013/14 at 913.9 MMT compared to 962.6 MMT from the USDA yesterday. Corn used in yesterday’s weekly ethanol production report was estimated at 92.8 million bushels. Corn usage needs to average 94.9 million bushels/week to meet this crop year’s USDA estimate of 4.6 billion bushels. On the international stage, South Korea bought 110 TMT of South American corn for Sep/Oct shipment. Weekly US corn export sales of only 149,500 MT offered little support (split 81,500 MT old crop and 68,000 MT new crop) versus trade forecasts of 2-400 TMT. Jul 13 Corn closed at USD6.43 1/2, down 7 1/4 cents; Dec 13 Corn closed at USD5.35 1/4, down 2 1/4 cents.

Wheat: The wheat market closed down, but well off the lows. Weekly export sales of 427,200 MT were at the low end of trade forecasts of 4-650 TMT, but did include some nice business to Brazil (130,700 MT). The USDA announced 1.19 MMT of old crop sales unfulfilled and carried over into 2013/14. Japan bought 157,439 MT of US, Canadian and Australian wheat in their tender. US Western White wheat was excluded again on GMO grounds. Taiwan tendered for 85,500 MT of US wheat but said that it wanted GMO exclusion guarantees to go with it. SovEcon upped their forecast for Russian wheat production from 50 MMT to 52 MMT, up sharply versus 37.7 MMT last year although 2 MMT less than the USDA predicted yesterday. With Russia needing to replenish government stocks depleted by intervention sales in excess of 3.5 MMT across the winter and spring, they forecast Russian wheat exports at 14-15 MMT compared with the USDA's estimate of 17 MMT yesterday. ABARES increased their forecast for Australian wheat production to 25.4 MMT versus 22.1 MMT in 2012/13 on increased plantings and better yields. The split is WA up from 6.9 MMT to 8.8 MMT; NSW up from 7.1 MMT to 7.6 MMT; SA up from 3.7 MMT to 4.1 MMT; VIC up fom 2.7 MMT to 3.1 MMT and QLD up from 1.7 MMT to 1.8 MMT. Jul 13 CBOT Wheat closed at USD6.85 1/2, up 2 1/2 cents; Jul 13 KCBT Wheat closed at USD7.18 1/2, up 2 cents; Jul 13 MGEX Wheat closed at USD8.12, up 5 3/4 cents.