Nogger's Blog

12/12/13 -- Soycomplex: Beans crashed lower, despite another week of string export sales, on what looks like continued long liquidation heading into the year end. Producer selling with futures prices over $13/bu is said to be brisk with the first new crop Brazilian soybeans expected to be harvested around New Year's Day. Weekly export sales of 1.1 MMT topped trade expectations for sales of 750-950 MMT. As ever, China (558,100 MT) was the biggest buyer. Total commitments for the season are now at 96% of the USDA forecast. The USDA also reported sales of 413,900 MT for 2014/15 delivery, with that particular campaign already off to an excellent start. Actual shipments this week topped 1.7 MMT, with over 1 MMT of that heading for China. The IGC forecast the world 2014/15 soybean crop at 288 MMT, up 2.1% on this season, with consumption coming in at 285 MMT. Looking ahead they projected global soybean output to rise to 312 MMT by 2018/19, with consumption at similar levels. They see 2018/19 world soybean ending rising from 29 MMT this season to 39 MMT five years from now. They expect Brazil's soybean area to grow from the present 29 million hectares to over 32 million by 2018/19, with Argentine plantings up more marginally - from 20.7 million ha to 21.1 million. By 2018/19 they suggest that Brazil's crop could swell to 99.5 MMT, with Argentine production exceeding 60 MMT and US output to 95 MMT. Chinese soybean production is seen declining slightly, from 12.5 MMT this year to 11.8 MMT by 2018/19. Chinese soybean imports will hit 83.5 MMT by then, from their current forecast of 68 MMT in 2013/14, they say. Oil World said that Australia's canola crop is yielding better than expected, and might exceed 3.6 MMT versus ABARES 3.4 MMT and the Australian Oilseeds Federation's 3.2 MMT. Harvesting is 75-85% complete, they added. MDA CropCast raised their forecast for Brazil's 2013/14 soybean crop by 620 TMT from last week to 88.16 MMT. Funds were estimated to have been net sellers of around 8,000 soybean contracts on the day. Dec 13 meal and oil go off the board tomorrow. Jan 14 Soybeans closed at $13.23 3/4, down 20 1/4 cents; Mar 14 Soybeans closed at $13.11 1/2, down 17 cents; Dec 13 Soybean Meal closed at $459.40, down $5.20; Dec 13 Soybean Oil closed at 39.80, down 40 points.

Corn: The corn market closed around 3-5 cents weaker, reversing yesterday's gains. Weekly export sales of 695,400 MT were in line with trade expectations of 600-750 TMT. Total commitments for the 2013/14 marketing year are currently at 72% of the USDA's target for the season versus 52% normally at this time. The USDA also reported sales of 109,400 MT for 2014/15 for Mexico. Shipments of 977,400 MT included 370,700 MT heading for China despite the ongoing problems with some consignments being rejected if they are found to contain traces of the non-approved MIR 162 strain. There's now talk of China also rejecting DDGS shipments from the US on the same grounds. The market was further unsettled by newswire reports that 10 US senators had raised a bill to eliminate the US ethanol mandate completely. They say that the mandate pushes up food prices, damages the environment, costs the US taxpayer billions of dollars and makes fuel prices more expensive. Like they've only just realised that? The USDA announced the sale of 120 TMT of US corn to unknown for 2013/14 shipment under the daily reporting system, but that caused hardly a ripple. FranceAgriMer cut their French corn production forecast from 15.16 MMT to 14.9 MMT (versus 15.34 MMT last year), they also trimmed exports from 5.86 MMT to 5.49 MMT (versus 6.76 MMT in 2012/13) and raised ending stocks from 2.95 MMT to 3.11 MMT (2.47 MMT last year). The IGC said that world corn production in 2014/15 will only fall surprisingly modestly, down 0.4% to 944 MMT. They see world consumption at 940 MMT next season, with production rising to 1016 MMT by 2018/19 and consumption at 1020 MMT. Brazil's corn crop will grow from 72 MMT this season to 83.8 MMT by 2018/19, whilst output in Europe is seen relatively flat over the next 5 years, at 66 MMT in 2018/19 versus 65 MMT this season. China's corn crop will swell from 210 MMT this year to 234.4 MMT five years from now, they estimate. Interestingly they don't see further dramatic growth in corn production in Russia or the Ukraine across the next five years. Both countries have tripled their output in only a few years, but if the IGC are correct then Russia's crop won't be any higher in 2018 than it is now, and Ukraine's will only be modestly higher at 30.7 MMT. Dec 13 Corn closed at $4.28 1/4, down 3 cents; Mar 14 Corn closed at $4.34 1/4, down 5 cents.

Wheat: The wheat market stumbled generally 6-8 cents lower, although front month Kansas wheat crashed over 27 cents. Dec 13 contracts expire tomorrow on all three exchanges. Weekly export sales of 372,200 MT were hardly thrilling, although trade expectations were also modest at 300-500 TMT. India reportedly picked up best bids of between $282-287 in a couple of tenders for various volumes of wheat out of both the east and west coast of the country. These prices are above the government's newly suggested floor of $260 and so presumably will get booked. The IGC forecast the world wheat crop up 0.4% to 699 MMT next year (2014/15), with consumption almost matching production at 697 MMT, an increase of 1%. Production, consumption and ending stocks are all well matched in their early projections for the next five years. Global output will grown to 737 MMT by 2018/19, with use at 738 MMT and ending stocks steady across the period at between 182-184 MMT. They see increased wheat plantings between now and 2018 in most of the major producers, with Europe's area rising from 25.7 million hectares to 26.5 million, and America's up from 18.5 million ha to 20.3 million. Production will climb in Argentina (up from 10.5 MMT in 2013 to 14.1 MMT in 2018), Russia (50.5 MMT to 56.8 MMT), Ukraine (22 MMT to 22.5 MMT), America (57.5 MMT to 65 MMT), whilst holding steady in Europe and declining from the current record high in Canada to around 30 MMT. Chinese wheat production will continue to see modest growth, up from an anticipated 118 MMT this year to almost 124 MMT in five years time. FranceAgriMer said that winter wheat plantings there are down 1.2% to 4.92 million hectares, whilst those for barley are down 0.4% to 1.13 million ha. They trimmed their forecast for the 2013 soft wheat crop in France from 36.96 MMT to 36.84 MMT (up 3.4% versus 35.62 MMT last year), with exports seen rising from the previous forecast of 18.975 MMT to 19.645 MMT thus ending stocks were cut from 2.9 MMT to 2.4 MMT. Brussels confirmed late in the day that they'd issued a further 780 TMT of soft wheat export licences this past week as demand for European wheat remains strong. That takes the cumulative total for the season so far to 12.55 MMT versus 8.6 MMT this time 12 months ago. Dec 13 CBOT Wheat closed at $6.22 1/2, down 7 3/4 cents; Dec 13 KCBT Wheat closed at $6.69 1/4, down 27 1/4 cents; Dec 13 MGEX Wheat closed at $6.52 1/4, down 6 1/4 cents.