Nogger's Blog

17/04/14 -- Soycomplex: Beans closed a little lower on light profit-taking ahead of the long weekend. They still managed decent gains for the week though. Fresh news was lacking heading into the Easter break. Weekly export sales for beans came in at a net 19,200 MT for old crop (with the trade expecting zero due to tightness in availability) and 400,700 MT for new crop (expecting 150-350 TMT) - the latter being mostly for unknown/China. Actual shipments themselves this week were 339,200 MT, continuing to slacken off - as they need to do. The US has now already shipped 41.5 MMT of soybeans abroad this year, and has outstanding sales of just over 3 MMT. The USDA estimate for the season is only 43 MMT, so the US has already exported 96.5% of the USDA target for the season, and has total commitments of 103.5%. Whilst talk of China now defaulting on as many as 30-40 cargoes of existing soybean purchases is bearish, outstanding sales from the US are only said to be 141,400 MT - so this is a much bigger problem for South America than it is for the US. The Argentine soybean crop is 21.4% harvested versus 38% a year ago. The Ministry there estimate production this year matching the 2009/10 record at 54.5 MMT, and up 12.4% versus 48.5 MMT last year. They say that Argentine growers have around 20% of their crop sold versus 25% this time a year ago. May 14 Soybeans closed at $15.14, down 4 3/4 cents; Jul 14 Soybeans closed at $15.02 1/4, down 6 1/2 cents; May 14 Soybean Meal closed at $488.30, down $2.70; May 14 Soybean Oil closed at 43.41, down 30 points. For the holiday-shortened week that puts nearby beans up 51 cents, with meal up $15.40 and oil 131 points higher.

Corn: The market also closed with modest losses of around 2-3 cents in light consolidation ahead of the Easter break. Weekly export sales came in at a combined 794,500 MT (including 192,600 MT of new crop), in line with the expected 600-900 TMT. In addition, the USDA announced 125,000 MT of corn sold to South Korea for 2013/14 shipment. Exports this week were 1,111,000 MT. MDA CropCast cut their forecast for Ukraine corn production this year by 1.1 MMT from last week to 27.1 MMT, a 10% fall on last year's record, although still easily their second largest crop ever (their previous best was 22.8 MMT in 2009/10). MDA CropCast also trimmed their view on Argentina's output next year by 1.5 MMT to 22.7 MMT. Strategie Grains estimated the EU-28 2014/15 corn crop at 65.1 MMT versus a previous estimate of 65.2 MMT and 64.1 MMT in 2013/14. The Argentine corn harvest is said to be 19.7% complete versus 31.7% a year ago. The Argentine Ministry estimated the 2013/14 corn crop at 23.5 MMT versus 27.0 MMT last year. They said that Argentine growers have sold 25% of their 2013/14 corn crop versus 57% a year ago. The US weather is finally about to improve, to the benefit of corn and soybean plantings. "The weather pattern in North America is expected to undergo a fundamental shift , finally warming up and turning significantly wetter. The biggest change would occur in the heartland, the Great Plains and western Midwest, where very strong warming is predicted along with generous rainfall. Spring weather conditions for many weeks have been cold and dry, so this represents a significant change for the better," said Martell Crop Projections. May 14 Corn closed at $4.94 3/4, down 2 3/4 cents; Jul 14 Corn closed at $5.00 1/2, down 3 cents. For the week that puts front month corn 3 3/4 cents lower.

Wheat: The market closed with modest gains across the three exchanges. Weekly export sales came in at 438,000 MT of old crop and 359,900 MT of new crop. That was towards the top end of trade expectations which had been as low as only 250 TMT to as high as 850 TMT on a combined marketing year basis. The old crop sales included increases for Brazil (85,000 MT, including 50,000 MT switched from unknown destinations). MDA CropCast said that Brazil's 2014/15 wheat crop would rise 29% to 7.1 MMT, on increased plantings. They also raised their forecast for Argentina's 2014/15 wheat output, up from 10.9 MMT last week to 11.9 MMT this week, and 17% higher than a year ago. The potential for both Brazil and Argentina to produce more wheat in 2014/15 is a significant one as US exports have received a major shot in the arm from demand from Brazil this season. Strategie Grains estimated the EU-28 soft wheat crop at 137.2 MMT, down 0.5 MMT from last month but still 2% higher year-on-year. They see exports in 2013/14 at a record 26.8 MMT, with those in 2014/15 falling to 22.4 MMT, both estimates are higher than a month ago. Seeing as wheat has been possibly the main beneficiary of the sudden upsurge in speculative interest that we've seen in the markets in the past couple of months, it will be interesting to see how it takes the news that broke late in the day of a "deal" of sorts between Russia, Ukraine and EU/US negotiators reached in multi-party talks in Geneva (if indeed it holds until Monday or even proves effective at all). May 14 CBOT Wheat closed at $6.91 1/4, up 3 1/4 cents; May 14 KCBT Wheat closed at $7.58, up 3 1/2 cents; May 14 MGEX Wheat closed at $7.32 3/4, up 6 1/4 cents. For the week that puts Chicago wheat up 31 cents, with Kansas gaining 38 1/2 cents and Minneapolis adding 31 cents.