Nogger's Blog

07/06/13 -- Soycomplex: New crop beans posted strong gains. The July 13 was pressured by funds rolling out of nearby longs and into the deferreds. Nevertheless beans gained for the sixth week in a row, their best run in 4 years, according to Bloomberg. The trade seems to be thinking that as well as some corn acres going unplanted this year, there could also be some soybean area unsown. The USDA will report on planting progress for both on Monday. Trade ideas seem to be that soybean plantings may have risen from 57% complete last week to around 70% done as of Sunday night. If correct that would still leave over 23 million acres still to be sown. CNGOIC estimated China’s May bean imports at 5.6 MMT and estimated June imports at 7.0-7.5 MMT. Informa estimated the 2013/14 world soybean crop at a record 286.6 MMT, up 7.5% on this season. They have US production up 12.3% at 92.2 MMT and Argentine output at 58.0 MMT, up 16%, both would be a record. They place Brazil's crop around the same at this year at 82.7 MMT. The Buenos Aires Grains Exchange reported Argentina's 2012/13 soybean harvest at 98% complete, up from 96.1% a week ago and versus 95% this time a year ago. They estimated output at 48.5 MMT, unchanged from their previous forecast. Weekend weather developments will decide price direction on Monday, after that we could be in for some consolidation in beans following recent gains as traders may decide to bank a few profits ahead of Wednesday's June WASDE report from the USDA. After that we're back to trading the US weather again. Jul 13 Soybeans closed at USD15.28 1/4, up 1 cent; Nov 13 Soybeans closed at USD13.30 1/4, up 24 1/2 cents; Jul 13 Soybean Meal closed at USD452.50, down USD1.50; Jul 13 Soybean Oil closed at 48.53, up 37 points. For Jul 13 beans and meal this was the highest close on the weekly chart since mid-September. Jul 13 beans closed 18 1/4 cents higher for the week, with Nov 13 up 26 cents. Jul 13 meal rose USD5.30 and Jul 13 oil added 15 points on the week.

Corn: Corn also rose, seeing the best gains coming in the deferred new crop months on continued heavy rains and planting delays in the Midwest. Monday night's crop progress report from the USDA is expected to show plantings at 93-95% done, up only marginally versus 91% as of last Sunday night. Weekend weather forecasts aren't friendly for much progress to me made in northern areas. "Over the next 5 days the latest GFS model has the heaviest rains falling from Central North Dakota to extreme Northern Montana and into Northwestern Illinois," say QT Weather. Consider though that even if we only end up with 95% of what was expected to be a 75-year high area get sown this year then that's still a respectable 92.4 million acres. Cut yields down to 155 bu/acre from the USDA's current 158 bu/acre and we could still end up with a record crop of almost 13.2 billion bushels allowing for a "normal" 8% abandonment rate. Informa estimated the US corn crop at 365.7 MMT, up more than 33% on last year. They have world output at a record 967 MMT, up 12.7%, with the EU crop rising 17.3% to 66.4 MMT (matching the 2004 record) and the Ukraine crop up 17.2% to a record 24.5 MMT. The Buenos Aires Grains Exchange said Argentina’s corn harvest is 61% complete, up from 54.7% a week ago and versus 64.8% a year ago at this time. They estimated production at 24.8 MMT, unchanged from last week. A consignment of 60 TMT of Argentine corn is en route to China, the trade is watching with great interest to see if it clears stringent Chinese quarantine rules OK. If it does it could be the first of many under a deal signed in February last year. It is probably not in China's best interests to reject the cargo, but that doesn't necessarily mean that they won't. The Mississippi river reopened a 5-mile stretch near St Louis, the river had been closed for 4 days due to high water. Ahead of next week's USDA report one trade survey estimated US corn production at 13.82 million bushels, versus 14.14 million last month. This season's ending stocks were forecast unchanged at 759 million bushels. The 2013/14 carryout is expected to come in at 1.830 billion bushels, down from 2.004 billion in May. Jul 13 Corn closed at USD6.66 1/4, up 3 cents; Dec 13 Corn closed at USD5.58 1/2, up 10 1/4 cents. For the week overall that puts nearby Jul 13 up 4 cents and Dec 13 down 8 3/4 cents.

Wheat: Nearby wheat closed modestly lower on all three exchanges. The window is rapidly closing for spring wheat planting, supporting prices in Minneapolis. US spring wheat planting was up just one point for the week to 80% done last Monday, and well behind the 5-year average of 92%. With another wet week behind it spring wheat planting may still only be around 83% done in Monday's upcoming report. Wheat production prospects elsewhere look pretty good though. Informa pegged the world wheat crop at a record 703.5 MMT, up 2.5 MMT on the USDA's May forecast and a 7.6% increase on last year with big gains seen coming from the Black Sea. The Buenos Aires Grains Exchange's weekly crop report estimated that 19.4% of their 2013/14 wheat crop is planted versus 9% a week ago and 11.1% a year ago. They estimated the wheat area at 3.9 million hectares, unchanged from their previous estimate. The Argentine Ministry say that plantings will rise from 3.16 million hectares last year to 4.0 million in 2013/14, an increase of 26.6%. A production increase of that magnitude would add almost 3 MMT to their crop next season, based on the USDA's estimate of 11.0 MMT in 2012/13. Looking ahead to Wednesday's WASDE report, the USDA had Kansas wheat production at 768 million bushels in its May Crop Production Report, down 236 million, or 23%, from 1.004 billion in 2012. The average trade guess for next week is 757 million bushels, from within a range of 675-815 million bushels. Early yield reports from Texas and Oklahoma are highly variable. The 2012/13 US wheat marketing year is now over. The USDA will need to reduce their forecast for US exports of 28 MMT in the year that has just ended, increasing beginning stocks for 2013/14. They may also revisit their projection for US exports of 25.5 MMT in 2013/14 in the face of much stronger competition from the Black Sea in the year ahead, and also reticence from Asian buyers to US wheat following the newly emerging GMO problems. Jul 13 CBOT Wheat closed at USD6.96 1/4, down 1 1/2 cents; Jul 13 KCBT Wheat closed at USD7.35, down 3 1/2 cents; Jul 13 MGEX Wheat closed at USD8.19 3/4, down 1/2 cent. For the week that puts Chicago wheat 9 1/4 cents lower, with Kansas down 16 cents and Minneapolis a quarter of a cent easier.