Nogger's Blog

29/04/14 -- Soycomplex: Beans closed with Jul 14 at contract closing highs and with new crop Nov 14 at the best levels since last July. Fund buying was estimated at a net 4,000 soybean contracts on the day, seemingly thinking that last night's announcement from the USDA that soybean planting across the US is "only" 3% complete, a whole one percentage point behind the 5-year average, is in some way significant. "The bulls are talking up cold and wet weather and planting delays but anyone betting against the US farmer should have their head examined. This crop will get in. Last year we experienced 100 year (record) rains and the crop still got in," one market observer sagely commented. Yields weren't ultimately too bad last year either at the end of the day, the best in fact since 2010. Production is what it's all about, and with $15 beans, record plantings look assured. A summer weather market will probably develop, one usually does, but the balance of probability suggests that record plantings will probably equal record production come the autumn. Consider too that Brazilian growers are also expected to plant a record 2014/15 crop, starting mid-September, hotly followed on the heels by Argentine farmers. Faced with that kind of potential deluge in supply the bulls need a serious weather problem AND Chinese demand to hold up. Neither looks assured at the moment. May 14 Soybeans closed at $15.24, up 15 3/4 cents; Jul 14 Soybeans closed at $15.17 1/4, up 17 1/4 cents; May 14 Soybean Meal closed at $499.90, up $3.00; May 14 Soybean Oil closed at 42.77, up 15 points.

Corn: The corn market posted decent gains or around 5-8 cents on the day. Funds were seen as net buyers of around 6,000 contracts on the day, enthused by the relatively slow start to the US spring planting season, and the forecast for cold and wet weather to hit the Midwest through to the weekend. The same comments that apply to the bulls getting excited about late planted soybeans also apply to corn. Last year's crop was similarly late, and US growers still brought in a record crop that ultimately yielded well. Other than that, fresh news was lacking. Ukraine is estimated to have around 40% of it's 2014 corn crop in the ground. Planting is also underway in Russia and other eastern European nations. It is also well advanced for the time of year in France - reported on Friday by FranceAgriMer at 68% complete, up 29 points in a week and versus only 25% sown this time a year ago. Brazil's safrinha corn crop meanwhile is said to be developing well, so much so that Safras e Mercado have just raised their estimate for Brazil’s 2013/14 total corn crop to 73.9 MMT, up from a previous forecast of 71.2 MMT. Ukraine said that it had exported a record 18.43 MMT of corn already this season. Tomorrow brings the usual weekly ethanol production data from the US Energy Dept. Last week's output was 910k barrels/day versus the circa 938k bpd required to hit the USDA's target for the season. May 14 Corn closed at $5.15 3/4, up 8 cents; Jul 14 Corn closed at $5.21 1/2, up 7 3/4 cents.

Wheat: The wheat market closed higher, with Kansas wheat displaying the most strength. Reuters reported that day one of the Wheat Quality Council's three-day crop tour found a yield potential of only 34.7 bu/acre, down sharply from 43.8 bu/acre a year ago (which is also the 5-year average finding), and said to be the lowest result in 13 years. "The crop is even worse than I expected it to be," one analyst on the tour was quoted as saying. Statewide Kansas wheat yields averaged 38 bu/acre last year, when the state produced almost 21% of the US winter wheat crop, and 15% of the nation's all wheat crop. "At this point in the growing season, you’d have to say that KS is holding on to production of 300 mb by a finger nail, but production is probably already a touch below that," said Benson Quinn Commodities. Output last year was 319 million bushels. Things are looking better in Nebraska though, where wheat yields should average 40 to 45 bu/acre, according to the executive director of the Nebraska Wheat Board. That's better than only 35 bu/acre last year. Internationally, Ethiopia has tendered to buy 70,000 MT of optional origin milling wheat. Lebanon picked up a best offer of Ukraine origin milling wheat in a tender to buy 30,000 MT for May shipment. The Philippines bought 52,500 MT of Australian origin feed wheat in a tender to buy 90,000 MT for Jun/Jul shipment. Argentina authorised a further 500,000 MT of wheat for export. May 14 CBOT Wheat closed at $7.08, up 7 3/4 cents; May 14 KCBT Wheat closed at $7.97 1/4, up 14 cents; May 14 MGEX Wheat closed at $7.46 1/4, down 4 cents.