Nogger's Blog

25/06/14 -- Soycomplex: Beans ended with small gains, with all eyes now firmly on the USDA's June plantings and quarterly stocks reports due on Monday. The latter is expected to show the lowest June US soybean stocks since 1977, according to Benson Quinn. Trade estimates for that are in the range of around 340-440 million bushels, with the average guess centred in the region of the 380 million mark. March 1st soybean stocks were 992 million bushels and year ago inventories were 435 million. It is said though that the USDA has come out with a higher stocks figure than the average trade estimate in 5 out of the last 7 years in this report. As far as the acreage report goes, the trade is looking at an average figure of 82.154 million (record high) for soybeans. The range of estimates are 80.5-84.0 million, the USDA's March estimate was 81.493 million and the 2013 acreage was 76.533 million. The average trade guesstimate therefore represents an increase in plantings of 7.3% this year as farmers are drawn to beans by high prices and a favourable bean:corn ratio. Reuters report that the US probably imported around 350 TMT of Brazilian beans in May and that record volumes of Canadian canola are also making their way into the US from Canada. Before we get Monday's USDA reports, we will have Stats Canada's 2014 acreage estimates released on Friday, and prior to that the regular weekly export sales report from the USDA tomorrow. That is expected to show beans sales of around 300-500 TMT skewed in favour of new crop. Old crop soybean sales do keep popping up in these reports though, confounding net cancellation expectations. An Aug sale (which was classed as old crop, although some say it is more likely to be new crop) of 140 TMT to "unknown" announced last week should show up in tomorrow's report. Jul 14 Soybeans closed at $14.15 3/4, up 2 1/4 cents; Nov 14 Soybeans closed at $12.29, up 4 1/2 cents; Jul 14 Soybean Meal closed at $451.70, up $3.30; Jul 14 Soybean Oil closed at 40.65, down 32 points.

Corn: The corn market closed around a cent or two lower, and traded within a very narrow range. As with soybeans, the trade is looking to Monday's USDA reports for some direction. The average guess for June 1 US corn stocks is 3.722 billion bushels, from within a range of estimates of 3.046-3.950 billion. The USDA's March 1 corn stocks were 7.006 billion bushels and June 1, 2013 corn stocks were 2.766 billion. US corn acres in 2014 are expected to come in at around 91.725 million. The range of estimates is 91.0-92.2 million, the USDA's March estimate was 91.691 million and the 2013 corn acreage was 95.365 million. The average guess therefore represents a reduction of 3.8% on last year, although 2013 was a 75-year high. According to a Reuters survey Stats Canada are expected to estimate corn plantings there at an average estimate of 3.236 million acres on Friday, down from a March estimate of 3.369 million, due to persistent cool and wet conditions this spring. The USDA attaché in China said that their corn crop is expected to reach a record high this year. The attaché estimates Chinese 2014/15 corn imports at only 3.0 MMT versus a previous estimate of 4.0 MMT. CNGOIC yesterday pegged the Chinese corn crop at 223.0 MMT up 2.1% from a year ago. They forecast Chinese 2014/14 corn imports at 3.5 MMT, down 12.5% versus this season. China only sold 425 TMT of the 2.7 MMT of corn reserves they had up for auction today. They will hold another sale for 2.3 MMT tomorrow. The ongoing dispute with the US over MIR 162 corn, and the resultant ban on China importing US DDG's continues to cap the upside potential for US corn. Russia's Ag Ministry said that their 2014 corn planted area is 2.7 million hectares versus 2.4 million a year ago. Recent rains have boosted the prospects for Ukraine corn production this year, meaning that output might not be too far behind last year's record levels despite the use of inferior quality seed, some suggest. Trade estimates for tomorrow's weekly export sales report from the USDA are 150-300 TMT of old crop and 200-300 TMT of new crop. The USDA announced 217,400 MT of old crop US corn sold to unknown today, that will be included in next week's report. Jul 14 Corn closed at $4.41, down 2 cents; Sep 14 Corn closed at $4.35 3/4, down 1 cent.

Wheat: The wheat market ended mixed, but mostly higher, with Kansas wheat displaying the most strength on continued reports of disappointing winter wheat yields on the Plains. The USDA announced 116 TMT of sorghum sold to unknown, split evenly between old and new crop. US wheat continues to be priced out to all but traditional homes by the impending Black Sea harvest, as highlighted in the weekend's Egyptian tender. Trade estimates for tomorrow's weekly export sales report are a relatively modest 300-500 TMT. Trade estimates for Monday's upcoming US all wheat plantings are averaging out at 55.818 million acres, from within a range of estimates of 54.8-57.0 million. The USDA March estimate was 55.815 million and the 2013 final all wheat acreage was 56.156 million. As you can see, there's not a lot of change expected there. For June 1 stocks, the average trade forecast is 598 million bushels. The range of estimates is 560-633 million, the USDA March 1, 2014 wheat stocks were 1.056 billion and June 1, 2013 wheat stocks were 718 million. Stats Canada's figures on Friday are expected to show a Canadian all wheat area of 24.5 million acres, down versus the April estimate of 24.936 million and versus the 2013 acreage of 26.257 million. The USDA attaché in China estimated the 2014/15 wheat crop there at a record 124.0 MMT. They see China's 2014/15 wheat imports at 3.0 MMT, less than half the 7.0 MMT imported in 2013/14. The Russian Ag Ministry said Russia has finished their spring wheat planting, estimating the area at 13.0 million hectares versus 12.8 million a year ago. They've also planted 8.8 million ha of spring barley. F.O. Licht estimated the EU barley crop at 53 MMT versus 59.6 MMT a year ago, due to reduced spring plantings because the mild European winter meant that wheat suffered less winterkill. They peg European barley demand at about 50 MMT. Jordan cancelled a tender for 100,000 MT of optional origin hard milling wheat for Dec/Jan shipment. Japan seeks 120,000 MT of feed wheat and 200,000 MT of feed barley in a tender for Oct shipment. Jul 14 CBOT Wheat closed at $5.75 1/2, up 4 1/2 cents,; Jul 14 KCBT Wheat closed at $7.14, up 8 1/2 cents; Jul 14 MGEX Wheat closed at $6.73 3/4, down 2 3/4 cents.