Nogger's Blog

29/11/13 -- Soycomplex: If the market was a bit unsettled by news on Wednesday that China had cancelled 300 TMT of existing US soybean sales, then it needn't have been. The USDA today reported soybean export sales of over 1.4 MMT, of which China took almost a million tonnes (992,900 MT). Talk that China doesn't really need all these beans and has only bought them for protection against possible shipping delays in South America later in the season was partially quashed by weekly exports of 1,843,800 MT also being primarily to China (1,326,300 MT). The US now has 93% of the USDA's soybean export target for the 2013/14 season on the books already. The 5-year average at this time is said to be around 67%. In addition the USDA also reported sales of 110 TMT of soybeans to China for 2014/15 delivery under the daily reporting system. Rising prices will of course encourage increased plantings in South America. The Buenos Aires Grains Exchange forecast that Argentine growers will plant 20.45 million hectares of soybeans this year, up from their previous estimate of 20.2 million and 3.8% more than the 19.7 million planted for 2012/13. Brazilian farmers will also plant more beans, with Dr Cordonnier forecasting production there in 2014 at 90 MMT, almost 10% higher than this year. US producers are also thought likely to "go large" with soybean plantings in the spring, encouraged by current price differentials with corn. Jan 14 Soybeans closed at $13.36 1/2, up 16 1/2 cents; Mar 14 Soybeans closed at $13.17 3/4, up 11 1/2 cents; Dec 13 Soybean Meal closed at $456.60, up $10.70; Dec 13 Soybean Oil closed at 40.22, up 22 points.

Corn: The corn market closed a holiday-shortened session a couple of cents lower. Weekly export sales came in at 1 MMT, in line with trade expectations of 800 TMT to 1.1 MMT. Unknown destinations (339,400 MT) were the largest buyer, followed by South Korea (178,700 MT) and China (131,500 MT). Exports of 701,000 MT were primarily to China (272,700 MT), Mexico (176,200 MT) and Japan (109,400 MT). Total net sales commitments on corn are now 71% of the USDA's forecast for the season versus 67% this time last year. The Chinese purchases and shipments came despite trade concerns that US corn exports there could be hit following the news that China rejected some more US transgenic corn overnight. Demand for US corn from the ethanol sector is going well, up 15.44% from a year ago, as margins remain healthy. US producer selling is said to be sluggish at these levels. The French corn harvest is making only very slow progress, at 73% done versus 98% a year ago. The Russian corn harvest is 79% done at 10.1 MMT. The Buenos Aires Grain Exchange cut their forecast for the Argentine corn planted area for 2013/14 from 3.46 million hectares to 3.3 million, down almost 12% compared with a year ago. The reduction is partly due to drought in a large part of the Pampas earlier in the year and a shift into soybean production, they said. There's talk of delayed Brazilian corn shipments arriving in Asia and swamping the market with physical supplies, potentially depressing fresh demand for US corn. Indian and Thai corn is also being offered cheaply into Asian homes. Dec 13 Corn closed at $4.15 1/4, down 2 cents; Mar 14 Corn closed at $4.24 1/2, down 2 cents.

Wheat: Wheat was mixed, up a bit in Chicago, flat in Kansas and down a little in Minneapolis. US export sales came in at 562,200 MT, including Nigeria (136,800 MT), unknown destinations (118,600 MT), Egypt (110,000 MT), China (59,700 MT) and Mexico (48,600 MT). That was within the range of trade estimates of 375-625 TMT. The Argentine Ministry forecast the wheat crop there this year at only 8.5 MMT, which is lower then the previously reported (and subsequently withdrawn as being incomplete) estimate of 8.8 MMT. The Buenos Aires Grain Exchange on the other hand stood by their estimate for a 2013/14 Argentine wheat crop of 10.35 MMT, adding that the harvest was 19.7% complete, around six points behind normal. The Russian grain harvest has moved slowly on to just under 95% complete, producing bunker weight a crop of 95.1 MMT to date, according to the Ag Ministry. Wheat accounts for just over 54 MMT of that, with almost 98% of the crop now harvested. SovEcon raised their forecast for Russia's 2013/14 grain exports from 20 MMT to 21 MMT, including 14.5 MMT of wheat. Chinese domestic wheat prices are said to be at, or close to, record levels. With quality milling wheat in short supply, the government sold 94% of the 650 TMT of wheat offered up for auction this week. There's talk that they will be back in the market to import wheat again as soon as the government issues fresh import quotas. Dec 13 CBOT Wheat closed at $6.55, up 3 3/4 cents; Dec 13 KCBT Wheat closed at $7.13 1/4, up 1/4 cent; Dec 13 MGEX Wheat closed at $6.86 3/4, down 3 1/2 cents.