Nogger's Blog

06/12/13 -- Soycomplex: For once, neither beans, corn nor wheat finished with anything other than minor changes. Nothing much has altered this week for beans, with very strong nearby demand tempered by the prospect of a huge South American crop around the corner. Around the corner isn't now though is it? The USDA announced the sale of 189,150 MT of US soybeans for 2013/14 delivery, and just for good measure threw in an additional 195,000 MT for 2014/15 shipment. Yesterday's weekly export sales mean that the US already had 95% of the target for the entire 2013/14 season on the books already. Brazil's soybean crop is 93% planted, up 5 points on the week, with some now pegging production in excess of 90 MMT versus the current record crop 82 MMT harvested earlier this year. There are reports that they'll be harvesting the first of the early soybeans in Brazil's top producing state of Mato Grosso by New Year's Day. There are some reports circulating that some Mato Grosso growers may plant a second soybean crop straight after this harvest. Normally they'd plant second crop corn, but current price differentials suggest that some may try a new approach. This may only provide short-term gain for long-term pain. Oil World note that the lack of crop rotation in Brazil and Argentina is already raising disease risk and curbing yields. Meanwhile the current Brazilian caterpillar infestation is spreading at an "alarming rate" they note. The Buenos Aires Grain Exchange said that soybean planting in Argentina is 58% complete, up from 49% a week ago and versus 54% this time last year. Rumours that Argentina may be about to temporarily reduce their soybean export tax to stimulate farmers to release the large volume of old crop stocks that they are sitting on have been denied by the Ministry. Cynics say that the government need the revenue too much to contemplate such a move, but 15-25% of something is surely better than 35% of nothing? Jan 14 Soybeans closed at $13.25 1/2, down 2 1/2 cents; Mar 14 Soybeans closed at $13.10 1/2, down 1 1/4 cents; Dec 13 Soybean Meal closed at $447.30, up $1.20; Dec 13 Soybean Oil closed at 40.28, down 10 points. For the week that puts beans down 11 cents, meal down $9.30 and oil 6 points higher.

Corn: The corn market ended around a cent or so higher on the day. Considering that China continues to reject some US corn shipments, on the grounds of them containing traces of the un-approved MIR 162 variety, the market has performed quite well this week. That's probably down to the fact that fund money appears more inclined to bank profits and cover in existing sales heading into the year end than establish fresh short positions, which is understandable. The Chinese are said to be continuing to evaluate the situation with MIR 162. The US are saying "hey, even the Europeans let this one in, so what's the problem?" Talk that some Brazilian growers might give up on second crop corn could provide a bit of support going forward. The Buenos Aires Grains Exchange said that corn planting in Argentina is 47% complete, up only a little from 44% a week ago and versus 55% done this time last year. There still seems to be some mileage in notion that South America's corn plantings and production for the 2014 harvest may fall below current area estimates. "Although 'mid-season' corn may be planted through to the end of February, it also produces a much lower yield. Full season varieties are far more productive," said Martell Crop Projections. Brazilian analysts Conab are due out on Tuesday with their latest production estimates. Last time they gave us a 2013/14 total corn crop estimated at 78.5-79.2 MMT and 2013/14 corn exports at 18.0 MMT. Both could be revised lower next week. Also due out on Tuesday is the December WASDE report from the USDA. This is not likely to include revisions to US corn production this year, that is usually left until the January report. This will include however the latest world production and demand estimates. We will also get the latest US and global ending stocks numbers. The trade is expecting an average Argentine corn production estimate of around 25.6 MMT versus 26 MMT last month, with a Brazilian crop of around 70.4 MMT versus 70 MMT in November. US 2013/14 corn ending stocks are forecast at an average 1.871 billion bushels versus 1.887 billion previously, and world ending stocks at 163.3 MMT, down 1 MMT from last month. The French corn harvest is making heavy weather of it (literally), at 85% done versus 99% a year ago. Dec 13 Corn closed at $4.24, up 1 1/4 cents; Mar 14 Corn closed at $4.34 1/4, up 3/4 cent. For the week Dec 13 corn was up 8 3/4 cents, with Mar 14 9 3/4 cents firmer.

Wheat: Wheat futures closed steady to 3 cents lower, but with losses of anywhere from 8 to almost 24 cents for the week across the three exchanges. Whilst there seems to be a pick-up in global interest in wheat, with Tunisia, Algeria, Libya, Morocco, Iran, Japan and Taiwan all buying this week, very little of that was thought likely to come from the US. Yesterday's disappointing weekly export sales, and much higher production numbers out of Canada and Australia than the trade expected this week have knocked market confidence. The fact that Brazil failed to show up at this week's export party has Benson Quinn posing the notion that "Brazil’s new crop seems to have arrived in better shape than many had feared and large scale imports of US HRW don’t appear imminent." This sees traders having second thoughts about predicting that the USDA will increase exports and lower ending stocks by 25 million bushels in the supply and demand report next week. Conab are due out with their Brazilian December supply & demand estimates on Tuesday. Last month they forecast the 2013/14 wheat crop at 4.81 MMT with imports estimated at 6.7 MMT. Argentina would normally supply much of that requirement. The Buenos Aires Grains Exchange said that the wheat harvest there is approaching 30% done, up from 20% a week ago and versus 23% this time last year. They stood by their production estimate of 10.35 MMT, which is considerably higher than some other forecasts recently thrown into the ring. A severe winter storm, stretching from the Texas/Mexico border all the way through to the Ohio Valley is seen possibly causing some damage to US winter wheat, although weekly crop condition reports from the USDA have now been discontinued until the spring. US and European winter wheat largely seems in pretty good condition versus 12 months ago. The Russian Ag Ministry said that the country has planted 12.23 million hectares of winter wheat, and will add a further 13 million to that in the spring, taking the total wheat acreage to in excess of 25 million hectares, similar to the area harvested in 2013. Tuesday's USDA report normally only deals with US demand and world production, not US production. We should see upward revisions to output in Canada and Australia, and probably a downwards tweak for Argentina. Dec 13 CBOT Wheat closed at $6.37 1/4, down 3/4 cent; Dec 13 KCBT Wheat closed at $7.05 1/4, up 1/4 cent; Dec 13 MGEX Wheat closed at $6.63, down 3 1/4 cents. For the week CBOT wheat down 17 3/4 cents, with KCBT losing 8 cents and MGEX shedding 23 3/4 cents.