Nogger's Blog

06/02/14 -- Soycomplex: Beans closed higher on continued strong demand. Weekly export sales came in at 577,000 MT for old crop and 219,500 MT for new crop. China took 436,400 MT of the old crop, including 180,000 MT switched from unknown destinations. There were cancellations of 530,500 MT of old crop, but nevertheless net sales of 577,000 MT and shipments this week of 1,508,100 MT take the total 2013/14 season commitments to 43 MMT. That gives the USDA an interesting problem to resolve in Monday's upcoming WASDE report, as they currently only estimate exports for the entire season at 40.7 MMT, and we still have 7 months of 2013/14 left to run! Note that 78% of the USDA's current export estimate has already been shipped. Very strong demand for meal is also keeping the domestic US soybean crush high, further eating into US soybean disappearance. The FAO increased their world soybean production forecast by 3 MMT from last time to 289 MMT, which is also 2 MMT more than the USDA's January forecast. They only see world ending stocks at 34 MMT, less than half the 72 MMT currently forecast by the USDA. FC Stone estimated Brazil’s 2013/14 soybean crop at 90.3 MMT versus a previous estimate of 90.2 MMT and 89 MMT from Washington. There are some suggestions that developing adverse weather in Brazil could take the shine off yields, especially in the south of the country. "Rainfall the past 2 weeks has dried up in South Brazil. Parana and Rio Grande do Sul may suffer reduced yields if rainfall does not increase very soon, placing 30% of Brazil soybeans in jeopardy. February rainfall is highly significant for the soybean yield as this is the main pod filling stage. Both the size and number of beans in the pod would shrink if drought worsens. Hot temperatures in South Brazil have further increased moisture stress this month. Temperatures frequently topped 90 F often reaching 95 F," said Martell Crop Projections. Mar 14 Soybeans closed at $13.25 3/4, up 9 1/2 cents; May 14 Soybeans closed at $13.11 3/4, up 12 1/4 cents; Mar 14 Soybean Meal closed at $446.00, up $4.00; Mar 14 Soybean Oil closed at 38.66, up 43 points.

Corn: The corn market was narrowly mixed, despite a second week of very impressive export statistics. The USDA reported old crop US corn sales of 1.7 MMT, up 94% on the previous 4-week average. Yesterday they also reported 185,928 MT of US corn sold to unknown destination for the 2013/14 season and 50,800 MT for the 2014/15 season. Taking the shine off those sales was news from the USDA announcing 220,000 MT of US corn sold to China for 2013/14 shipment had been cancelled, presumably due to the ongoing problem with rejections of corn shipments containing the non-approved MIR 162 variety is still to be resolved. Total US corn export commitments for 2013/14 are now 33.5 MMT versus a USDA full season export projection of 37 MMT, which is 90.5% of that total. The FAO pegged the 2013/14 global corn crop at one billion tonnes, up 14.3% on a year ago. They see ending stocks at 175 MMT versus 132 MMT last year and 160 MMT from the USDA. FC Stone estimated Brazil’s 2013/14 corn crop at 72.2 MMT versus a previous estimate of 72.4 MMT and 70 MMT from the USDA. They see Brazil’s 2013/14 corn ending stocks at 7.08 MMT versus 9.81 MMT from the USDA. Problems persist for corn potential in Argentina. "Corn prospects in Argentina are way worse than soybeans. The majority of corn pollinated under severe moisture stress in January, before drought breaking rains developed. This caused severe and irreversible damage to the corn yield, as kernels not successfully pollinated would never develop into grain. A significant amount of corn was planted late, having shallow roots, when drought and heat stress developed. Corn stunted by drought had small ears. Damage to corn was most severe in Buenos Aires the top corn producing province," said Martell Crop Projections. The USDA attaché in Mexico estimated their 2013/14 corn crop at 21.5 MMT versus the official USDA figure of 21.7 MMT. Mar 14 Corn closed at $4.43, down 1/4 cent; May 14 Corn closed at $4.48 1/2, up 1 cent.

Wheat: The wheat market put in a strange close across the three exchanges, ending anywhere from 6 cents lower to 8 cents higher. Weekly export sales of 638,800 MT for delivery during the 2013/14 marketing year were down 15 percent from the previous week, but up 62 percent from the prior 4-week average. There were also net sales of 94,800 MT for 2014/15. Brazil (82,500 MT, including 25,000 MT switched from unknown destinations) showed up amongst the old crop sales. Total commitments for 2013/14 now stand at 26.7 MMT, or 87.5% of the USDA's target of 30.5 MMT for the season. The 5-year average for this time of year is 84%, so things are a little better than normal, but not dramatically so. Japan bought bought 312,816 MT of wheat for March – June shipment, split between US, Canadian and Australian origin. Oman bought 20,000 MT of Indian wheat for March/April shipment. The FAO increased their world wheat production estimate by by 3 million tonnes, reflecting bigger crops in Canada. The wheat usage forecast for 2013/14 was lowered slightly compared to the previous report mainly on downward adjustments in feed use of wheat in the US, they said. World wheat ending stocks were pegged at 176 MMT, up 11.4% on 2012/13. "In the US, winter wheat is overall in good condition and seeded area is slightly down relative to last season. Continued dryness across the Southern Plains is raising concern over the dormant crop, particularly in areas that have experienced colder than normal temperatures and lack protective snow cover," they added. As far as wheat prices go "reports from Canada of wheat oversupply and from India of expectation of a bumper crop in 2014 added to the downward pressure (last month)", they noted. Mar 14 CBOT Wheat closed at $5.80 3/4, down 6 3/4 cents; Mar 14 KCBT Wheat closed at $6.48 3/4, down 2 1/2 cents; Mar 14 MGEX Wheat closed at $6.38 1/4, up 8 3/4 cents.