Nogger's Blog

30/12/13 -- Soycomplex: Beans fell on news that some parts of Argentina picked up needed rain over the weekend, and reports that the 2013/14 soybean harvest in Brazil's top producing state of Mato Grosso was now underway. "Severe drought in Argentina has eased with strong showers recently in the top farm provinces. A 3-week stretch of intense heat and dryness is giving way to showers as a cool front pushes northward through the Argentina grain belt. Buenos Aires, the top farm province, has already received generous rainfall in excess of 1 inch (25 millimetres)...still dry, the northern third of the Argentina soybean belt is expecting soaking rainfall with a north-moving cool front. Around 1–1.5 inches of rain is predicted in soybean areas of Santa Fe, upper Cordoba and Chaco," said Martell Crop Projections. Southern Brazil, which has also been dry, is expecting even heavier rains. Meanwhile the new crop soybean harvest is reported to have begun in Brazil's Mato Grosso, a few days earlier than anticipated, most likely on early planted and irrigated land. Harvesting here should pick up by the middle of January and be in full swing by the end of next month. Morgan Stanley forecast the Brazilian soybean harvest at just under 87 MMT, up 6% versus last year, with the Argentine crop seen 13% higher at almost 56 MMT. Both would be record output. The Rosario Grain Exchange estimated the Argentine crop a little lower at 55 MMT. The USDA reported the sale of 35 TMT of US soybean oil to unknown for 2013/14 shipment. Jan 14 Soybeans closed at $13.28 1/4, down 3 1/4 cents; Mar 14 Soybeans closed at $13.08 1/2, down 5 1/4 cents; Jan 14 Soybean Meal closed at $450.80, up $5.10; Jan 14 Soybean Oil closed at 38.57, down 45 points.

Corn: The corn market slumped on South American rains. In Argentina's Cordoba, a key corn area, "scattered heavy rain fell on Saturday night from a cluster of strong thunderstorms. Up to 3 inches of rain occurred," said Martell Crop Projections. "Very heavy rainfall is now predicted Brazil’s two southern farm states (Rio Grande do Sul and Parana), with 3-4 inches based on the 7-day GFS model. The forecast is even wetter in southern Brazil than in Argentina," they added. The Rosario Grain Exchange said that Argentine farmers will plant 3.9 million hectares of corn this year, down 0.5 million on a year ago. They estimate production at 22 MMT (far below the USDA's 26 MMT) and say that plantings are currently around 70% complete. US corn prices are now down almost 40% since the turn of the year, which Reuters say is the largest annual slump ever. UkrAgroConsult forecast the 2013/14 Russian corn exports at 3.3 MMT, a jump of 74% on last year as production rises from 8.2 MMT to a record 11.0 MMT. Ukraine has also seen a large leap in corn output in 2013, with this year's harvest now well past the 30 MMT mark, also a record production number. US weekly export inspections for the week ending December 26th for corn were 24.908 million bushels, down from 37.255 million a week earlier, but not a bad total for Christmas week (shipments last year were only around 8 million). Despite the ongoing problems, China was responsible for 5.371 million bushels of that total. Asian buyers are said to be holding off booking US corn cargoes in anticipation of picking up cheap distressed offers on the back of the recent spate of Chinese rejections, the total for which is now said to exceed 600 TMT. Mar 14 Corn closed at $4.23 1/2, down 4 cents; May 14 Corn closed at $4.31 3/4, down 4 cents.

Wheat: Friendless wheat slumped around 5 to 9 cents lower on the day across the three exchanges. Fund money seems more than content to drive this market lower heading into the year end. The latest Commitment of Traders report shows them adding to their net short for the week through to Christmas Eve. They were estimated to have been further net sellers of around 2,000 Chicago wheat contracts on the day today as prices fell to a contract low on the Mar 14, and now look in danger of falling below the $6/bu level for the first time for a front month since May 2012. The Rosario Grain Exchange increased their forecast for the Argentine wheat crop to 9.5 MMT, courtesy of yields rising from the 2.71 MT/ha estimated previously to 2.78 MT/ha. Nationally the wheat harvest is said to be 70% complete, with much of what remains to be cut coming from some of the more productive areas in Buenos Aires Province. India's State Trading Corp has issued a tender to export 160 TMT of wheat for shipment between Jan 18 and Feb 18 as they continue to attempt to make some room for their impending 2014 crop, harvesting of which is expected to begin in the second half of March. Talk of damage to US winter wheat from the current cold snap gripping the Midwest could be premature, said Global Weather Monitoring. The coldest temperatures will focus in on Minnesota, Iowa, and northern Illinois - much of which are said to have adequate snow cover. Temperatures on the US Plains meanwhile will not fall low enough to cause any damage it is thought. Weekly US export inspections came in at 13.39 million bushels versus trade expectations of 16 to 22 million. Mar 14 CBOT Wheat closed at $6.00 1/4, down 8 3/4 cents; Mar 14 KCBT Wheat closed at $6.35, down 9 1/4 cents; Mar 14 MGEX Wheat closed at $6.29, down 5 3/4 cents.