Nogger's Blog

09/08/13 -- Soycomplex: Funds continue to liquidate positions ahead of the USDA report on Monday. The latest Commitment of Traders report shows managed money decreased their net long position in soybeans by 31,910 contracts to leave them net long only 45,580 lots as of Tuesday night. Many still believe that the USDA's Chinese soybean import demand estimate of 69 MMT is overstated, given that it’s 10 MMT higher than in 2012/13. Whilst China's July imports were a record, imports for the first 7 months of the year total 34.69 MMT as compared to 34.92 MMT for the same period last year. Any downwards reduction in Chinese demand by the USDA on Monday would have a direct effect on world 2013/14 ending stocks. These are forecast by the trade to come in at around 73.5-74.0 MMT, which would be up sharply on the 61.4 MMT forecast for 2012/13 world soybean ending stocks. Lanworth Inc estimated the 2013 US soybean crop at 3.32 billion bushels versus a previous estimate of 3.31 billion. The average trade guess for Monday from the USDA is 3.338 billion bushels, from within a range of estimates of 3.22-3.40 billion. The USDA's July estimate was 3.42 billion and the 2012 US bean crop was 3.015 billion. For 2013 US soybean yields the average trade estimate is 43.472 bu/acre, from within a range of estimates of 42.0-44.4 bu/acre. The USDA July estimate was 44.5 bu/acre and the 2012 US soybean yield was 39.6 bu/acre. Aug 13 Soybeans closed at USD13.40 3/4, down 15 cents; Nov 13 Soybeans closed at USD11.82 1/4, down 2 cents; Aug 13 Soybean Meal closed at USD420.50, down USD2.00; Aug 13 Soybean Oil closed at 41.40, down 25 points. For the week that puts front month beans 9 3/4 cents higher with meal up USD8.40 and oil down 98 points.

Corn: The prospect of a bumper 14 billion bushel plus 2013 US corn harvest sees funds apparently comfortable not just sitting on a record large short position in CBOT corn, but adding to it. The latest Commitment of Traders report shows managed money increasing their net short position in corn by 4,983 contracts for the week through to Tuesday night. That brings their total net short position to 113,072 contracts - the largest on record since the report was first issued in 2006. CNGOIC estimated China’s 2013/14 corn imports at 5.5 MMT versus 2012/13 corn imports of 2.7 MMT. The USDA currently predict Chinese 2013/14 corn imports of 7 MMT. CNGOIC said China has already bought about 4.0 MMT of US corn for 2013/14 delivery. Anacer said Italy had imported 1.542 MMT of corn between Jan-May versus 985,651 MT a year previously. Lanworth Inc estimated the 2013 US corn crop at 14.06 billion bushels versus a previous estimate of 14.0 billion. They now have yields estimated at 159.1 bu/acre versus a previous estimate of 158.5 bu/acre. The average trade guess for Monday from the USDA puts the US corn crop at 13.98 billion bushels, from within a range of estimates of 13.485–14.269 billion. The USDA's July estimate was 13.95 billion and the 2012 crop was 10.78 billion. A crop of 13.98 billion would therefore be a near 30% increase on last year. For US corn yields the average trade estimate is 157.72 bu/acre, from within a range of estimates of 154.0-161.2 bu/acre. The USDA July estimate was 156.5 bu/acre and 2012 yields were 123.4 bu/acre. The trade expects 2012/13 world ending stocks at around 124 MMT, rising to around 151 MMT in 2013/14. Sep 13 Corn closed at USD4.65 3/4, down 7 3/4 cents; Dec 13 Corn closed at USD4.53 1/4, down 6 1/2 cents. For the week Sep 13 fell 10 1/4 cents, with new crop Dec 13 down 10 1/2 cents to a new more than 2 1/2 year low.

Wheat: With corn and soybeans falling out of bed, wheat was also dragged lower. The latest Commitment of Traders report shows managed money increasing their net short position in Chicago wheat by 6,567 contracts, bringing their total net short position to 47,335 lots. Many Eastern European nations such as Romania, Bulgaria and Hungary are forecasting if not record, then at least bumper wheat production this year. Output from Russia, Ukraine and Kazakhstan is also expected to deliver a sharp rebound versus production in 2012. CNGOIC estimated China’s 2013/14 wheat imports at 6.5 MMT versus a previous estimate of 5.0 MMT, although below the USDA's current forecast of 8.5 MMT. Some private estimates are 10 MMT or even higher. Lanworth Inc have the 2013/14 global wheat crop estimated at 692.0 MMT versus a previous estimate of 694.0 MMT. The Buenos Aires Grains Exchange left its forecast for the Argentine wheat area unchanged from a week ago at 3.9 million hectares. That's slightly higher than the 3.8 million that the Rosario Exchange said earlier in the week. Plantings last year were 3.6 million ha. The Buenos Aires Grains Exchange said that planting is 97.9% complete versus 95.3% a week ago and added that plantings should be completed in the next 10 days. Trade forecasts for the 2013 US all wheat crop average 2.112 billion bushels, from within a range of estimates of 2.025-2.148 billion. The USDA's July estimate was 2.113 billion and 2012 US all wheat crop was 2.269 billion. World 2013/14 wheat ending stocks have an average estimate 171.838 MMT, from within a fairly wide range of estimates of 168.0-181.11 MMT. That's little changed from the USDA's July estimate 172.38 MMT. Sep 13 CBOT Wheat closed at USD6.33 1/2, down 7 3/4 cents; Sep 13 KCBT Wheat closed at USD6.97 1/4, down 4 3/4 cents; Sep 13 MGEX Wheat closed at USD7.32, down 1 1/2 cents. For the week that puts CBOT wheat 27 cents lower, with KCBT down 9 1/2 cents and MGEX losing 9 1/4 cents.