Nogger's Blog

16/05/14 -- Soycomplex: Beans finished mixed, lower on old crop and higher on new crop. Fresh news was limited to end the week. The USDA reported private soybean sales of 180 TMT to "unknown" for 2014/15 shipment. They also reported the sale of 40 TMT of soyoil to China for 2013/14 shipment. Rumours of a vessel set to load beans in Brazil bound for China being unable to obtain a Letter of Credit dampened sentiment. The South American harvest is entering the final straight, just about done in Brazil and past two thirds of the way through in Argentina. Both are expected to have brought in record soybean crops, and both might fancy a tilt at breaking that record again in 2014/15. US growers certainly also will, with the USDA reporting plantings there at 20% complete as of last Sunday, which now is in line with the 5-year average of 21% despite all the talk of weather-related delays. That may have advanced to something like 30-35% this week, we will know on Monday night. As of this Sunday last year plantings were only 24% done. US soybean ending stocks to usage at the end of 2013/14 is currently seen at a record tight 3.8%, expanding to a more comfortable 9.6% by the end of 2014/15. World ending stocks in 2014/15 meanwhile are expected to be almost 12 MMT above the previous record high at 82.23 MMT. China will auction another 300 TMT of soybean reserves on Tuesday next week. Ukraine is 95% planted on it's intended sunflower acreage and 90% done with it's anticipated record 2014 soybean crop. South Korea bought 55 TMT of South American soymeal for Sep 1-20 shipment in a tender. The latest Commitment of Traders report shows managed money increasing its long in beans by a net 6,281 contracts for the week through to Tuesday night. Jul 14 Soybeans closed at $14.65, down 5 1/4 cents; Aug 14 Soybeans closed at $13.99 3/4, down 2 cents; Jul 14 Soybean Meal closed at $480.20, down $1.20; Jul 14 Soybean Oil closed at 40.75, down 29 points. For the week that puts front month beans down 36 cents, with meal losing $17.30 and oil falling 23 points.

Corn: The corn market ended with little change on the day, but lower for the week. The trade expects that US farmers will have made good progress with corn plantings again this week, with the USDA likely to maybe report that 70-75% of the crop is in the ground as of Sunday night. A year ago US farmers equalled their busiest corn planting week on record, sowing 43% of the crop in a week, to take plantings to 71% complete. "I wouldn’t be surprised if corn planting is north of 75% complete on Monday afternoon’s report," said Benson Quinn's Brian Henry. "China is formalizing plans to auction the first 1 MMT of what’s reported to be 70 MMT of reserve corn stocks. They could feasibly offer a total of 20 MMT over the course of the next 6 months," he added. That is a phenomenally large volume of corn. No wonder they are in no hurry at all to approve the MIR 162 variety, which has effectively halted imports from the US entirely. Chinese think tank CNGOIC yesterday estimated China's 2014/15 corn production at a record 222.1 MMT, outstripping consumption by almost 26 MMT. Ukraine reported corn planting at 89% complete. Russia is 79% done, and France 92% finished. Weakness in wheat weighed on corn for a third day today. Tonight's Commitment of Traders report shows fund money shedding 11,435 contracts of their length for the week through to Tuesday night. That still left them net long of a meaty 255k lots, which in theory could see the market have some more downside if they continue to ditch that length. They've certainly been net sellers since Tuesday night, dumping an estimated 5,000 lots on Wednesday and a further 10,000 contracts on Friday. They were judged to have been net sellers of maybe 1,000 in the corn pit today. The USDA currently see 2014/15 US corn ending stocks to usage rising to 12.9%, although that is dependent on a record high 2014 average yield of 165.3 bu/acre, which may be over optimistic. World ending stocks to usage in 2014/15 is seen at 18.8%, although again this relies for a large part on these record US yields being achieved. Jul 14 Corn closed at $4.83 1/2, down 3/4 cent; Sep 14 Corn closed at $4.81 1/4, up 1/4 cent. Corn lost 22 cents on the front month this week.

Wheat: The market closed lower across the three exchanges, with Chicago wheat again managing to put up the best show of resistance. Egypt bought just the one cargo of Ukraine origin wheat in it's tender for late June shipment. Russia said that it had planted 53.5% of it's intended spring grains acreage, including 34.4% of it's wheat and 73.8% of it's barley. Ukraine's spring grain area is 89% planted, according to the local Ministry. Winter wheat planting is now underway in Argentina, with the Buenos Aires Grain Exchange forecasting an 18.8% hike in area to 4.3 million hectares. Good moisture profiles, good prices (relative to corn) and crop rotation purposes all offer growers an incentive to plant more this year, they said. SovEcon increased their forecast for Russia's 2013/14 wheat exports from 17.8 MMT to 18.4 MMT. There's some suggestion that the high level of Russian exports this season will mean that carryover at the end of the season is only minimal. That may explain why there were no Russian offers in the Egyptian tender. The Indian Ag Ministry estimated their 2014/15 wheat crop at a record 95.85 MMT, up from 93.61 MMT a year ago. US spring wheat plantings continue to lag, however strong Midwest warming is predicted next week, according to Martell Crop Projections. "Temperatures are predicted be above-average in the mid 70s-mid 80s F. Night temperatures would rise into the 60s F, a big improvement," they said. However, with the rise in mercury also comes "a renewed risk of showers and thunderstorms, although the 6-10 day forecast is favourable for advancing spring planting suggesting near average Midwest rainfall and temperatures," they added. Tonight's Commitment of Traders report shows fund money about square in Chicago wheat for the week through to Tuesday night. Their net long stands at 45,307 contracts. They were however net sellers of 2,353 Kansas wheat contracts, and are estimated to have been further significant sellers since. Jul 14 CBOT Wheat closed at $6.74 1/4, down 4 cents; Jul 14 KCBT Wheat closed at $7.67 3/4, down 11 cents; Jul 14 MGEX Wheat closed at $7.39 1/4, down 15 3/4 cents. Chicago wheat lost 39 3/4 cents on the week, with Kansas wheat down by 51 1/4 cents and Minneapolis losing 55 1/2 cents.