Nogger's Blog

27/11/13 -- Soycomplex: Beans closed lower, after the January contract had earlier raced to fresh post-harvest high of $13.41/bushel on continued strong export demand. The USDA announced 235 TMT of US beans sold to unknown, split 180 TMT for 2013/14 shipment and 55 TMT for 2014/15. Lanworth estimated the 2013/14 global soybean crop at 289.0 MMT, unchanged from their previous estimate, and 5.5 MMT more than the USDA's current forecast. South American weather is mostly favourable. The USDA are due to release the weekly export sales data on Friday, as the markets are closed for Thanksgiving tomorrow. Trade estimates are for another robust week of soybean sales, which are estimated at around 700 TMT - 1.2 MMT. Meal sales are forecast at 150-300 TMT and oil sales at 10-20 TMT. The Energy Dept said that soybean oil used for biodiesel in September was 502 million pounds, down from 510 million in August. Friday is a holiday shortened session, and trade could be thin due to many making a long weekend of it. Today's lower close probably had a lot to do with book-squaring and profit-taking after the recent rally. Producer selling is said to be good with beans over $13/bushel and the inverse market. Everybody is expecting a monster crop from South America in the spring, will we get it? If we do, then front end logistical problems look assured. Record crops could easily equal record shipping delays, particularly in the run up to a World Cup in Brazil. What a great time to strike in an effort to cause maximum disruption. Truckers, dockers, stevedores, customs officials, civil servants, bus drivers, I can see them all fancying taking a pop at the government in an attempt to get more pay and better working conditions. The US look like they will have shipped most of their beans by then so where else do you go? Argentina will also inevitably see an opportunity to go on strike to better their lot too. All that indicates large front end premiums across the summer, possibly record large. Now may well not be the right time to book your soybean/meal requirements for next summer, but getting a large chunk covered well in advance may well prove to be a shrewd move. Jan 14 Soybeans closed at $13.19 1/2, down 9 3/4 cents; Mar 14 Soybeans closed at $13.05 3/4, down 6 1/4 cents; Dec 13 Soybean Meal closed at $446.80, down $3.40; Dec 13 Soybean Oil closed at 39.96, down 39 points.

Corn: The corn market headed into the Thanksgiving Day break mixed. South Korea's KFA bought 58 TMT of US corn and their NOFI Group bought 60 TMT of US corn, both for May shipment. The weekly ethanol grind jumped from 904,000 barrels/day last week to 927,000 bpd this time round. A year ago that was only 803,000 bpd. US ethanol stocks fell 100,000 from last week to 15.0 million barrels - said to be the lowest since weekly record keeping began in 2010 and well down on 18.3 million a year ago. JC Intelligence estimated China’s 2013/14 corn imports at 6.6 MMT, unchanged from their previous estimate and slightly lower than the USDA's figure of 7.0 MMT. They said that China had cancelled one cargo of US corn due to it's GMO status. Lanworth estimated the 2013/14 global corn crop at 963.0 MMT, unchanged from their previous estimate and almost identical to the USDA's 962.8 MMT forecast. Ukraine's Ag Ministry estimated 2013/14 Ukraine grain exports at 32.5 MMT versus previous estimate of 30.0 MMT and up over 40% from 2012/13 exports of 23.0 MMT. Much of that increase is due to corn. Ukraine has exported almost a much corn (5.3 MMT) as wheat (5.9 MMT) in the marketing year to date, and corn exports are now running well ahead of wheat on a week by week basis. Hungary estimated it's 2013/14 corn crop at 6.8 MMT, up 43% versus 4.74 MMT last year. They said that harvesting is 99% complete. Russia's corn harvest is 77% done at 9.9 MMT, with the USDA forecasting production 40% higher at 11.5 MMT this year. Societe Generale forecast US corn prices to rise to "nearly" $5/bushel by the end of 2014, citing "notable" demand for US corn and a likely decline in production in South America in 2013/14. Trade estimates for Friday's weekly export sales report for corn are 800 TMT-1.1 MMT. Dec 13 Corn closed at $4.18, down 1/2 cent; Mar 14 Corn closed at $4.26 1/2, up 1 3/4 cents.

Wheat: The wheat market closed 6 cents lower to 9 cents higher on the day across the three exchanges, with the Kansas market displaying the most strength for a second day on what looks like unwinding of spreads and short-covering. Any shorts in KCBT Dec wheat are getting squeezed. US wheat was out-gunned in the Egyptian tender, but the market can draw some solace from the fact that on an FOB basis it was "priced to sell" at around $20/tonne below the average French/Romanian offerings. MDA CropCast cut their Argentine wheat production forecast by 0.5 MMT from last week to 9.4 MMT. CBH said that the Western Australian grain harvest is advancing rapidly, and that they expect to have taken in 10 MMT of new crop grain by the end of the month, which would be a record for that time. Last year they'd received only 6.4 MMT by the end of November. Lanworth estimated the 2013/14 global wheat crop at 706.0 MMT, down 1 MMT from their previous forecast, but close to the USDA's 706.4 MMT and still a record crop. Looking into next year they forecast the 2014/15 US wheat crop at 63.0 MMT, up 8.6% form 58 MMT this year. They see Russia's 2014/15 wheat crop at 51.7 MMT, similar to this year, with Ukraine's output up by around 1 MMT to 23 MMT. There was talk of 2 cargoes of US HRW having been sold to Brazil. The Indonesian Wheat Flour Mills Association estimated their 2013 wheat imports at 6.5 MMT versus a previous estimate of 7.0 MMT. They placed 2014 wheat imports at 6.5-6.7 MMT. Reuters reported that Indonesia is looking elsewhere than Australia for food imports because of a diplomatic rift over phone bugging accusations. Algeria's government estimated their 2013 grain crop at 4.9 MMT versus 5.1 MMT a year ago. Trade estimates for tomorrow's weekly export sales report are 375-625 TMT. Dec 13 CBOT Wheat closed at $6.53 1/4, up 6 3/4 cents; Dec 13 KCBT Wheat closed at $7.13 1/4, up 9 cents; Dec 13 MGEX Wheat closed at $6.89 1/4, down 6 cents.