Nogger's Blog

07/01/14 -- Soycomplex: Nearby beans and meal continue to be supported by strong demand. That demand was underlined by the USDA announcing the sale of 350 TMT of US beans to China for 2013/14 shipment, contrary to the bears' expectations that large scale Chinese cancellations might be just around the corner. There's talk of China seeking/buying 2-4 more US bean cargoes for March/April shipment, as well as actively shopping for up to 300 TMT of Brazilian beans for later on in the year. Chinese industry analysts estimated 2013 bean imports at 62.86 MMT versus 58.38 MMT in 2012. Dr Cordonnier forecast the Brazilian bean crop at 90.0 MMT, unchanged from previously. He was also said to have estimated the Argentine bean crop unchanged from last time at 56.0 MMT. Both would be record output. The average trade estimate for Friday's 2013 US soybean production is 3.28 billion bushels. The range of estimates are 3.24–3.33 billion. The current USDA estimate is 3.258 billion and 2012 crop was 3.034 billion. Yields are forecast at 43.3 bu/acre, from within a range of estimates of 42.7-44.0 bu/acre. The current USDA estimate is 43.0 bu/acre and 2012 yields were 39.8 bu/acre. In Argentina's Buenos Aires province "extreme heat is predicted today (98 F) and again Wednesday (95 F) falling to 90 F Thursday-Friday. A sharp cool front is expected on the weekend along with scattered strong thunderstorms. The GFS model predicts at least one inch of rainfall in northern Buenos Aires province and throughout the Argentina grain belt. If heavy rainfall develops, as predicted, crop damage would be mitigated," said Martell Crop Projections. Jan 14 Soybeans closed at $12.99 1/2, up 2 3/4 cents; Mar 14 Soybeans closed at $12.76, down 3/4 cent; Jan 14 Soybean Meal closed at $434.60, up $5.80; Jan 14 Soybean Oil closed at 37.70, down 17 points.

Corn: The corn market closed around 2 cents lower in two-sided trade. There's no sign yet of a resolution to the dispute between the US and China on the non-approved MIR 162 corn variety. Some reports however suggest that more US corn and DDGs are now starting to clear Chinese customs. Dr Cordonnier estimated the Brazilian corn crop at 68.5 MMT unchanged from his previous estimate. He cut his forecast for the Argentine corn crop to 23.0 MMT from a previous estimate of 24.0 MMT. Heat and dryness remains an issue in Argentina where corn planting is said to be around 80% complete, with about 25-30% of the crop pollinating, putting corn more at risk of crop losses than soybeans currently. "Buenos Aires growing conditions have become increasingly more stressful from an extremely dry atmosphere. Pehuajo, a farm town in western Buenos Aires , reported a maximum temperature of 103 F on Sunday, January 5. This was followed by 59 F for the night low temperature, causing a range of 44 F degrees. This indicates an extremely dry atmosphere, more typical of a desert climate than the humid temperate zone, where the daily range in temperatures is 20 F degrees," said Martell Crop Projections. Trade estimates for Friday's USDA report have the 2013 US corn crop at an average of 14.07 billion bushels, the range of estimates is 13.897–14.255 billion. The latest USDA estimate was 13.989 billion and the 2012 crop was 10.780 billion. For yields the average trade estimate is 161.2 bu/acre, from within a range of estimates of 159.8–163.3 bu/acre. The current USDA estimate is 160.4 bu/acre and the 2012 yield was 123.4 bu/acre. The Energy Dept will release their latest weekly ethanol grind data tomorrow. Last week's production fell to 913,000 barrels/day from 926,000 bpd the previous week. Fund rebalancing of futures positions is expected to start tomorrow and last 5 days, and they are thought likely to be in the market for a significant volume of corn. Mar 14 Corn closed at $4.26, down 1 3/4 cents; May 14 Corn closed at $4.33 3/4, down 2 cents.

Wheat: The wheat market closed little changed. The ongoing very cold spell gripping the US supports the market, with one weather analyst quoted as saying that 15% of the US winter wheat crop was "at risk" from winterkill damage. At risk doesn't necessarily mean "lost" of course, but the truth is that nobody knows right now what, if any, damage has been done at all. "Extreme cold continues in North America for the second straight day. Sub-zero F temperatures this morning delved deep into the Deep South with 16 F reported at New Orleans, Louisiana, and single digits in Georgia. Midwest temperatures are somewhat “less cold” than yesterday though still well below zero F. This is the coldest weather in the United States heartland since 1988. The weather pattern is about to undergo a significant change however. Extreme cold would give way to moderating temperatures Thursday –Sunday. Chicago, Illinois, is expected to warm up to 37 F Friday whilst by Sunday St Louis, Missouri, may reach 50 F. The deep, cold trough in the jet stream, now present, would retreat north into the Great Lakes area at the weekend, while a warm ridge in Western United States expands into the US heartland. Winter wheat growing areas in Kansas would see a rapid snow melt, as temperatures rise into the low low 50s F on Saturday-Sunday. Below freezing temperatures would continue at night. Thus the warm-up would not be strong enough to coax wheat out of dormancy," said Martell Crop Projections. The USDA will report Friday on US winter wheat planted area, with the average trade guess for all wheat coming in at 43.5 million acres. Note that this is from within a fairly wide range of estimates of 42.5-44.6 million. Last year the total winter wheat acreage was just over 43 million. We will also get the latest quarterly stocks numbers, with US Dec 1 wheat stocks estimated at an average of 1.4 billion bushels, from within a range of 1.3-1.8 billion and versus 1.67 billion a year ago. There is some debate as to how much wheat may have been fed in the US during September as feeders awaited the arrival of the 2013 US corn harvest. Mar 14 CBOT Wheat closed at $6.02 1/2, down 3 1/4 cents; Mar 14 KCBT Wheat closed at $6.45 1/4, up 1 1/4 cents; Mar 14 MGEX Wheat closed at $6.30 3/4, up 1/4 of a cent.