Nogger's Blog

14/10/13 -- Soycomplex: Beans managed a modest rebound from Friday night's 20-month low as widespread Midwest rains are seen disrupting harvest activity. A Reuters survey estimated on average that the US 2013 soybean harvest is 45% complete. The range of estimates was a wide 35-72%, which highlights once more the degree to which the trade is stumbling along blindfolded without the USDA data to go on. Also missing was Friday's CFTC data. The trade estimates that funds are long around 110-120,000 soybean contracts. China imported 4.7 MMT of soybeans in September, down 5.4% from a year ago and down 26.2% versus August. Jan/Sep imports are at 45.75 MMT, up 3.3% versus the same period in 2012. CNGOIC estimated China's soybean crop at 12.5 MMT, down 4.2% from a year ago. The Buenos Aires Grains Exchange estimated Argentina’s 2013/14 soybean planted area at a record 20.2 million hectares, up 2.5% from a year ago. Safras e Mercado weekly said that Brazilian soybean planting is 6.7% complete versus 2.8% a week ago, 9% a year ago and 6.2% on average. Rain is moving into Brazil's top producing state of Mato Grosso, which is what growers there have been waiting for. "The GFS model predicts good rainfall in Mato Grosso and the tropics at large over the next several days. If rain materialises, as expected, soybean planting would move aggressively forward," said Martell Crop Projections. Whilst the USDA reports are absent, trade remains subdued, volume is relatively light and the daily trading ranges are narrower than normal. Nov 13 Soybeans closed at USD12.73, up 6 1/4 cents; Jan 14 Soybeans closed at USD12.71 3/4, up 5 1/2 cents; Oct 13 Soybean Meal closed at USD423.20, up USD1.20; Oct 13 Soybean Oil closed at 40.19, up 8 points.

Corn: The corn market also managed modest gains, in its case rebounding from a 37 month low. China's CNGOIC estimated corn production there at a record 215 MMT, up 4.6% versus last year and 4 MMT higher than the USDA currently say. A Reuters survey estimated the US 2013 corn harvest at 31% complete. The range of estimates was 25-40%, the average estimate a week ago was 20% complete. A year ago the corn harvest was 79% complete and the 5-year average for this time is 42% complete. Trade estimates are that funds sit on a large net short position in corn of around 150,000 contracts, leaving the market vulnerable to a correction if we get a bullish surprise when the USDA finally re-open for business. On the other hand a bearish surprise could send the market plunging to new lows. For example, Ag Resource today estimated the 2013 US corn yield at 160.0 bu/acre versus 155.3 bu/acre from the USDA last month. Safras e Mercado said that the Brazilian summer corn crop is 42.1% planted versus 43.2% a year ago. An EPA administrator indicated that they have not made a final decision on bio-fuel blending requirements for 2014 and that last week's leaked report looking to cut the mandate was merely part of a draft proposal. "Argentina weather conditions have turned warmer and wetter in mid October, improving corn planting conditions. Strong showers have finally developed in Cordoba, Buenos Aires and Santa Fe, ending a long drought in the top corn producing areas. Most farms received 25-50 mm of rainfall last week, 1-2 inches, though localised thunderstorms caused heavier rain. This was sufficient rainfall for corn planting to begin in earnest," said Martell Crop Projections. Dec 13 Corn closed at USD4.37, up 3 3/4 cents; Mar 14 Corn closed at USD4.49 3/4, up 3 1/2 cents.

Wheat: Wheat closed virtually unchanged on all three exchanges. CNGOIC estimated this year's Chinese wheat crop at 122.2 MMT, up 1.1% on last year and 1.2 MMT more than the USDA. China increased the state support price for wheat in 2014 to a very healthy CYN2,360/tonne, which is around USD386/tonne to encourage production. The trade estimates, in the absence of any CFTC data, that funds have cut their net short position in wheat from near record levels to around 18-20,000 lots. CBOT wheat doesn't appear to have enough of a bullish story to break through USD7.00/bu, not with corn shaping up like it might test USD4.00/bu that's for sure. Winter wheat conditions on the US Plains look far better than they did this time a year ago. Strong demand for US wheat from Brazil is providing underlying support. Wheat harvesting in the Brazilian state of Parana is said to be about halfway through. They are only expected to harvest a crop of around 1.7 MMT, 18% less than last year, despite planted area being 25% higher due to severe frost losses. The FAO estimated Russia's 2013/14 grain crop at 87.4 MMT, up 25.6% on last year, although below the Russian Ministry's 90 MMT forecast. The FAO have the Russian wheat crop at 51.5 MMT, up 36.6% on last year. They see 2013/14 Russian grain exports up by a third at 20 MMT, including 14.5 MMT of wheat, 2.6 MMT of barley and 2.7 MMT of corn. Russian grain exports last week fell to 380.5 TMT from 406.1 TMT the previous week. Ukraine's grain exports were up to 580 TMT from 458.3 MMT the previous week. Wheat accounted for 265.1 TMT of Russia's weekly exports and 415.6 TMT of Ukraine's. Dec 13 CBOT Wheat closed at USD6.92 1/2, up 1/4 cent; Dec 13 KCBT Wheat closed at USD7.61 1/2, up 1 1/4 cents; Dec 13 MGEX Wheat closed at USD7.56 1/2, up 1 3/4 cents.