Nogger's Blog

05/07/13 -- Soycomplex: Front month July beans closed higher, but all other positions were lower on a combination of a strong dollar and a non threatening weather outlook for the Midwest lasting at least until the middle of the month. Weekly soybean export sales of 120,600 MT of old crop and 249,100 MT of new crop were in line with trade forecasts for combined sales of 200-500 TMT. Meal sales of 116,300 MT of old crop were up noticeably from recent weeks. New crop meal sales were 4,200 MT. Trade expectations were for meal sales of a combined 50-125 TMT. This strong demand for old crop meal is one of the main factors supporting the nearby market. Jul 13 meal is currently running at a huge premium of around USD130 over Dec 13. The Brazilian truckers strike ended yesterday. Dock worker strikes however are lined up for Jul 10-11th. These disruptions may keep nudging a little bit of old crop demand back to the US, where pipeline supplies are already razor thin. Chinese industry analysts estimated China’s June soybean imports at 7.28 MMT and July's imports at 7.5 MMT. The USDA attaché in China estimates 2012/13 bean imports at 59.5 MMT, rising to 67.5 MMT in 2013/14, a bit lower than the USDA's official forecast of 69 MMT although still a record by a long way. CONAB release their July Brazilian crop forecasts on Tuesday. Last month they had the 2012/13 Brazilian soybean crop at 81.3 MMT and 2012/13 exports at 36.78 MMT. Prior to that the USDA will release their weekly crop progress report on Monday night. We then get the July WASDE report from the USDA on Thursday, along with the regular weekly export sales. Jul 13 CBOT contracts expire on Friday. Jul 13 CBOT soybeans closed up 4 1/2 cents at USD15.88; Nov 13 beans closed down 22 1/2 cents at USD12.28 1/4; Jul 13 meal closed down USD1.50 at USD489.10; Jul 13 soybean oil closed at 47.23, up 1 point. For the week that puts Jul 13 beans up 13 1/2, Nov 13 beans down 21 3/4 cents,  Jul 13 meal down USD1.20 and Jul 13 oil up 81 points.

Corn: As with beans the combination of a strong US dollar and the "hot house" effect of warm, wet and sunny weather in the Midwest sent corn futures lower in all but front month Jul 13, strong nearby demand continues to support that. Weekly export sales of 233,100 MT of old crop and 81,400 MT of new crop were at the low end of trade expectations for sales of a combined 250-500 TMT. In addition, the USDA announced the sale of 120 TMT of new crop corn to unknown under the daily reporting system. The Buenos Aires Grain Exchange estimated the Argentine corn harvest at 84.1% complete versus 76.9% a week ago and 81% a year ago. They forecast the Argentine corn crop at 24.8 MMT, unchanged from their previous estimate. The USDA attaché in China estimated the 2013/14 Chinese corn crop at 210 MMT versus an official USDA estimate of 212.0 MMT. APK Inform estimated the Ukraine corn crop at 23.9 MMT versus the USDA's 26.0 MMT forecast. They see corn exports rising from 13.5 MMT to 17.0 MMT in 2013/14, which is 1 MMT more than the USDA currently predict however. The FAO yesterday predicted a record world corn crop of 972 MMT in 2013/14, up 9 MMT on last month. The EU Commission meanwhile forecast an EU-28 corn crop of 70.02 MMT this year, also a record and up nearly 17% on last season. CONAB come out Tuesday with their monthly Brazilian crop report. Last month they estimated Brazil's 2012/13 corn crop at 78.5 MMT. There's talk that corn prices in Brazil are now well below the cost of production in the interior, given the huge expense of transporting the crop to the ports. This could have a negative impact on Brazilian corn production in 2013/14. The USDA currently predict output falling to around 72 MMT next season, other private estimates are in the 65-70 MMT region. Jul 13 CBOT corn closed 6 1/2 cents higher at USD6.84 3/4; Dec 13 corn fell below the USD5/bu mark for the first time since 2010, closing at USD4.91 1/4, down 11 1/2 cents. On the week that puts Jul 13 up 5 1/2 cents, with Dec 13 down 19 3/4 cents.

Wheat: The announcement of another sale of US SRW wheat to China wasn't enough to send the market higher, weighed on by new crop corn slumping to fresh lows. Weekly export sales of 593,000 MT were also pretty decent. In addition, actual shipments of 688,500 MT included 233 TMT heading for China. There are further rumours of other sales to the Chinese still to be confirmed. The USDA attaché in China estimated their 2013/14 wheat crop at 118 MMT versus an official USDA estimate of 121 MMT. The attaché forecast China's 2013/14 wheat imports at 4.0 MMT versus an official USDA estimate of 3.5 MMT. These would be the highest level of imports in 9 years, and some analysts think that they could in fact end up being far higher than this. The National Australia Bank forecast 2013/14 wheat production there at 24.0 MMT, up from 22.1 MT last year, but below the 25.4 MMT predicted by ABARES and the 24.5 MMT estimated by the USDA. NAB see Australia's wheat exports falling from 20.1 MMT to 15.8 MMT in the season ahead on increased competition from the Black Sea. AKP Inform said that Russia's 2012/13 wheat ending stocks finished at a 10-year low of just 2.8 MMT. They see Russian production up 38% in 2013/14 at 52.1 MMT, with exports rising a similar percentage to 15.0 MMT. The Argentine wheat crop is 66% planted versus 53% last week and 58% last year, according to the Buenos Aires Grain Exchange. A report on Reuters said that the Argentine government had invoked a special law stating that wheat and flour producers must "take the necessary commercial actions to adequately supply the domestic market, starting on the day that this resolution is published," effectively blocking exports. Argentine wheat output fell to its lowest level since 1995 last year as growers scaled back on plantings due to dissatisfaction with the government's constant interference in the market Jul 13 CBOT wheat closed 1 3/4 cents lower at USD6.56; with Jul 13 KCBT wheat down 7 cents at USD6.76 1/2 and Jul 13 MGEX wheat closed unchanged at USD7.61 1/4. For the week that puts Chicago wheat up 7 1/2 cents, with Kansas up 1/4 cent and Minneapolis down 23 3/4 cents.