Nogger's Blog

21/01/14 -- Soycomplex: Beans fell hard on weekend rains in Argentina, and the forecast for more to come, along with unconfirmed rumours that China had begun cancelling US soybean purchases and switching them to Brazil. The forecast for Argentina has 1/2 to 1 1/2 inches of rain for 70-80% of the country's growing areas, with temperatures cooling from 95-100 degrees into the mid-80's to low 90's range. AgRural estimated the Brazilian bean crop at 88.8 MMT versus a previous estimate of 89.4 MMT. They said that the Mato Grosso bean harvest is 4% complete versus 3% a year ago. Celeres said that, as of Jan 10, Brazilian growers had 41.7% of their 2013/14 soybean crop sold versus 55.9% a year ago due to less attractive prices. They estimated Brazil’s 2013/14 bean crop at a record 89.9 MMT. Oil World estimated US Sept – Feb bean exports at a record 34.8 MMT versus 31.15 MMT a year ago. They pegged full season US exports at 41.2 MMT. Chinese customs confirm Dec soybean imports at 7.4 MMT, up 25.7% versus Dec 2012. That takes the 2013 calendar year imports to 63.375 MMT, up 8.55% versus 2012. Of that volume 50% came from Brazil, 35% from the US, 10% from Argentina and 3.6% from Uruguay plus smaller volumes from Canada/Russia etc. In volume terms imports from the US were down 14.38% versus 2012, whilst those from Brazil were up 33.14% and those from Argentina were up 3.87%. China also imported 3.663 MMT of rapeseed in 2013 (up 25% versus 2012) with 2.79 MMT (76%) coming from Canada and 855 TMT (23%) from Australia. Funds were estimated to have dumped around 12,000 lots of their soybean length on the day. Weekly export inspections were a respectable 56.591 million bushels, although that's slightly below 59.382 million for the same week last year. Mar 14 Soybeans closed at $12.80 1/2, down 36 cents; May 14 Soybeans closed at $12.64, down 33 1/4 cents; Mar 14 Soybean Meal closed at $416.50, down $18.00; Mar 14 Soybean Oil closed at 38.10, up 36 points.

Corn: The corn market was flat to a cent higher, doing its best to ignore weakness in beans. Safras e Mercado estimated the Brazilian corn crop at 75.6 MMT, down 7.9% on last year. They see summer production at 28.2 MMT, with second crop corn at 47.4 MMT. The USDA currently estimate the Brazilian corn crop at only 70 MMT. Japanese corn usage in animal feed in November was 44.4%, up from 43.6% in October and 42.5% in November 2012. Chinese customs confirmed Dec corn imports at 821 TMT, up 209.2% versus Dec 2012. That takes the 2013 calendar year imports to only 3.265 MMT however, down 37.3% versus 2012. SovEcon estimated Russia's 2013/14 corn exports at 3.5 MMT. Jan exports are seen at around 500 TMT, down from the record 682 TMT shipped out in December. South American weather is seen improving. "Thunderstorms developed overnight in Argentina’s southern grain belt. Parts of western Buenos Aires, a key corn producing area, received heavy rain overnight. Generous rain is expected to spread northward through the grain belt. The GFS model sees the potential for 1.5-2 inch rains from strong thunderstorms. Rainfall is needed to quench drought. Extreme heat was reported again yesterday in the grain belt with highs of 96-100 F. Strong cooling would develop the balance of the week, behind a progressive cold front," said Martell Crop Projections. Weekly US export inspections of 29.811 million bushels were better than the 20-25 million expected. Iran was said to have bought "at least" 50 TMT of Brazilian corn for Jan-Feb shipment. Some say that the volume could be double that. Israeli buyers are tendering for 90 TMT of corn for Apr/May shipment. The Energy Dept's regular weekly ethanol production report is delayed until Thursday following the MLK Day holiday. Funds were estimate to have been light net buyers of around 3,000 corn contracts on the day. Mar 14 Corn closed at $4.25, up 1 cent; May 14 Corn closed at $4.32 1/4, up 1/2 cent.

Wheat: The wheat market attempted a feeble recovery from Friday's lows in the overnight session, trading modestly higher for most of the day. Ultimately though, the wheat market finished with losses of around 1-4 cents across the three exchanges by the close of play. Mar 14 CBOT wheat posted a fresh contract low close and the lowest finish for a front month in 3 1/2 years. Weekly export inspections were only 15.557 million bushels versus 25.596 million for the same week last year. The trade was expecting 17-22 million. Chinese customs confirmed Dec wheat imports at 389 TMT, up a whopping 6938% versus Dec 2012. That takes the 2013 calendar year imports to 5.5 MMT, up 49.3% versus 2012. Of that total 3.82 MMT (69%) came from the US, 867 TMT (16%) from Canada and 611 TMT (11%) from Australia. They are reported to be in the market seeking 200 TMT of Australian wheat at the moment. There's also talk of them seeking US wheat for April shipment. Algeria seeks 50 TMT of milling wheat of optional origin, but probably French, for April shipment. Iraq seeks 50 TMT of hard wheat, and will probably buy Australian origin. India is tendering to sell 60 TMT of wheat for Feb-March shipment. Bids for that are expected to be in the mid to  low $270's FOB, which would still be well above the government's stated minimum price. Japan was said to have bought 50 TMT of Canadian feed wheat. There's talk of another Arctic blast hitting the US Midwest on Thursday, which could be a threat for winter wheat. Black Sea wheat also remains at risk of winterkill. Moscow will see single digit temperatures this week, with only limited snowfall. The Russian Ministry managed to pick up only 5,400 MT of wheat in it's first intervention purchase of 2014. That takes the total volume bought so far to less than 550 TMT compared to an original target of 5-6 MMT. Some think that only 2-3 MMT is a more realistic aim, but at this rate even that looks ambitious. Mar 14 CBOT Wheat closed at $5.62 1/4, down 1 1/4 cents; Mar 14 KCBT Wheat closed at $6.21 1/4, down 2 cents; Mar 14 MGEX Wheat closed at $6.13 3/4, down 4 cents.