Nogger's Blog

27/09/13 -- Brazilian Crop Weather: "Rainfall has begun to increase in South Brazil, improving field moisture for corn planting. Last week, scattered showers brought 0.75 to 1.5 inch of rainfall to south-eastern South America. Parana and Rio Grande do Sul, key corn states, received a good soaking rain along with eastern Argentina and Uruguay. These were the first good rains of the spring season. Central Brazil has been very hot and dry in September. However the new forecast is hopeful for rain. A trough of low pressure would bring instability to the region stalling in central Brazil for a while and causing recurring showers. The GFS model predicts at least one inch of rainfall but locally more in Central Brazil. Rain is needed to accelerate corn planting in southern and central Brazil. Soybeans are sown later, mostly in October and November. Brazil’s leading soybean state Mato Grosso has been extremely hot and dry, as producers wait for the rainy season to begin. September temperatures have frequently exceeded 95 F, even reaching 100 F with a lack of rainfall in recent weeks. The monsoon typically strengthens in October, improving field moisture and permitting soybean planting to move forward in Brazil's top soybean state. As showers increase, the temperatures begin to moderate. Mato Grosso soybean planting last season was delayed by a slow-developing monsoon. Most soybeans were planted after October 25. The delayed planting did not have a negative bearing on soybean production though, as the Brazilian harvest made a record," said Martell Crop Projections.

Soycomplex: Nearby beans closed with small gains on the day and for the week. Any pre-USDA report positioning seems to be done, as the trade awaits Monday's stocks numbers for guidance on where to go next. The USDA's capacity for surprise is of course legendary, will they spring another one on Monday? They did last year, and corn closed limit up, wheat up 40-50 cents and beans dragged 30 cents firmer despite a bigger stocks number than anticipated for the latter. The trade average guess for old crop soybean ending stocks on Monday is 124 million bushels. With Monday also being month end an quarter end things could get choppy. Yesterday's large weekly export sales means that the US already has 69% of the USDA forecast for the full season on the books, and either shipped of waiting to go versus the 5-year average of 46.9%. A report on Reuters suggests that Argentine farmers are "hoarding" beans as a hedge against inflation. This isn't the first time that this has been mooted. Argentine growers are said to have sold 68-70% of their 2012/13 soybean crop versus 85% this time a year ago and the 5 year average of 78%. Rains are in the forecast for Argentina which has yet to begin planting the 2013/14 soybean crop. Argentine sunflower planting is only 21.1% complete versus 18.9% a week ago and 28.8% a year ago. China is closed for a week starting Tuesday. Taiwan bought 50 TMT of Brazilian beans for March shipment. Nov 13 Soybeans closed at USD13.19 3/4, up 3 cents; Jan 14 Soybeans closed at USD13.21 1/2, up 2 3/4 cents; Oct 13 Soybean Meal closed at USD419.90, up USD3.50; Oct 13 Soybean Oil closed at 41.51, down 28 points. Nov 13 beans were 4 1/2 cents higher on the week, Oct 13 meal rose USD6.50 and Oct 13 oil fell 58 points versus last Friday.

Corn: The corn market settled slightly lower on the day, and marginally higher on the week. Monday's USDA report is expected to show old crop US corn ending stocks of around 680 million bushels, some 20 million higher than the USDA had in the September WASDE report. South Korea's Kocopia bought 55 TMT of optional origin corn for Jan shipment. South Korea's MFG bought 120 TMT of corn split 70 TMT from South America for March shipment and 50 TMT of optional origin for Feb shipment. The Philippines are said to have bought 30 TMT of corn from Thailand this week. You will note that none of these sales are guaranteed US origin, but despite that cumulative US corn sales stand at 44.5% of the USDA forecast for 2013/14 marketing year versus a 5 year average of 38.3%. The Buenos Aires Grains Exchange say that lack of rain means that Argentine corn planting is only 4.6% complete versus 2.8% a week ago. Last year it was 9.6% complete and the 5 year average is 14.6% at this time. They estimate the 2013/14 corn planted area at 3.56 million hectares. China's National Development and Reform Commission (NDRC) announced corn import quotas of 7.2 MMT for 2014. The Russian corn crop is only 13% harvested at 1.5 MMT. Ukraine is also struggling to harvest what it hopes will be a record corn crop due to almost constant rain. The US harvest is ongoing, and better than expected yields keep getting reported. Informa apparently raised their forecast for the US 2013 corn crop by almost 150 million bushels to 13.889 billion bushels. Dec 13 Corn closed at USD4.54, down 2 3/4 cents; Mar 14 Corn closed at USD4.66 1/2, down 3 cents. For the week that puts Dec 13 up 3 cents and Mar 14 up 2 3/4 cents.

Wheat: Wheat closed higher for the fifth straight session on a combination of short-covering and positioning ahead of Monday's stocks and production numbers. The average trade guess for Sep 1 US wheat stocks is 1.913 billion bushels, but the range is wide at 1.819 to 1.999 billion, so there's plenty of scope for either a bullish or bearish surprise to be sprung there. The USDA will also report on 2013/14 US wheat production, with the average trade guess at 2.108 billion bushels, from within a range of estimates of 2.016 to 2.137 billion and the USDA's previous estimate of 2.114 billion. Talk of Chinese buying interest, strong demand from Brazil and possible crop damage in Argentina have spooked a few shorts this week. We've also seen continued strong global demand and now there's talk of acute planting delays in winter wheat in Russia and Ukraine. The USDA today announced the sale of 121,600 MT of US wheat sold to unknown for 2013/14 delivery. The sale included 55,000 MT of hard red winter wheat, 38,800 MT of soft white wheat and 27,800 MT of hard red spring wheat. China's NDRC put 2014 wheat import quotas at 9.6 MMT. The Buenos Aires Grains Exchange said that 22% of the Argentine wheat area is in fair to poor condition. The Ukraine Farmers Association estimated Ukraine’s winter grains are only 20-25% planted due to heavy rains. The Ukraine Ag Ministry said that winter grains had only been planted on 1.987 million hectares (including 1.8 million of wheat) versus 4.525 million (including 4.1 million of wheat) this time a year ago. Dec 13 CBOT Wheat closed at USD6.83, up 4 3/4 cents; Dec 13 KCBT Wheat closed at USD7.31 3/4, up 4 1/2 cents; Dec 13 MGEX Wheat closed at USD7.31 1/2, up 7 cents. Chicago wheat was up 36 3/4 cents on the week, with Kansas up 35 cents and Minneapolis gaining 31 3/4 cents.