Nogger's Blog

06/06/14 -- Soycomplex: Beans closed mixed, with front month Jul 14 losing ground as fund money continues to roll out of nearby longs. Fresh news is generally lacking ahead of next Wednesday's USDA WASDE report. That is expected to continue to show a very tight old crop US soybean supply, with 2013/14 ending stocks maybe getting trimmed slightly from last month's 130 million bushel estimate. Continuing with the "soybean jam tomorrow" theme that has been around for some considerable time now, the average new crop ending stocks estimate is 319 million bushels. They may also increase US soybean imports from the existing 90 million bushel forecast. Argentine production could be in for a rise from last month's 54 MMT. Before that we get the USDA's latest crop progress report on Monday, with the trade expecting plantings close to 90% complete versus 78% a week ago, and the first crop condition ratings of the season for soybeans to come in around 70-75% good/excellent. The Buenos Aires Grains Exchange said that soybean harvesting in Argentina was now 80.6% complete versus 73.8% a week ago and 98% a year ago. They still predict production at a record 55.5 MMT. Informa yesterday estimated Argentina's soybean crop at 55.0 MMT versus a previous estimate of 54.0 MMT. They see Brazil's 2013/14 soybean crop at 87.4 MMT, unchanged from their previous estimate. China’s Minitry of Commerce estimated the country's May soybean imports at 5.94 MMT, falling to 4.06 MMT in June. Jul 14 Soybeans closed at $14.57, down 3 1/2 cents; Nov 14 Soybeans closed at $12.18 3/4, up 8 1/4 cents; Jul 14 Soybean Meal closed at $487.60, down $3.00; Jul 14 Soybean Oil closed at 39.01, up 32 points. For the week, Jul 14 beans fell 26 1/4 cents, with meal down $12.60 and oil gaining 51 points.

Corn: The corn market jumped 10-12 cents, with fund money stepping in for an estimated net 6,000 contracts. Spillover support came from a short-covering rally in wheat. In a market that's desperate for some bullish news, there's some "hot air" - literally - over the potential for a warm and dry spell developing later in the month (around the Jun 17-20 period). "While this pattern is not expected to last very long....it suggests a minor shift in the recent wet/cool weather pattern that much of the corn belt has benefited from," said Benson Quinn Commodities. It doesn't sound like much of a game changer to me. Indeed, you could say that a spell of warmth and dryness is exactly what the newly planted corn crop needs at the moment, rather than an extended cool and wet spell. In other news, China sold 1 MMT of the 3.5 MMT of corn offered up at yesterday's auction. There are reports that a US corn boat was able to unload at a Chinese port yesterday. The Argentine harvest continues to run well behind schedule. The Buenos Aires Grains Exchange placed harvesting at only 38.5% complete versus 35.8% a week ago and 61.1% a year ago. They estimated production at 24.0 MMT, unchanged from their previous estimate. Informa also has Argentina's corn crop estimated at 24.0 MMT versus a previous estimate of 23.3 MMT. They now see total output from Brazil at 73.8 MMT versus a previous estimate of 73.0 MMT. They have the Russian 2014 corn crop estimated at 11.5 MMT, and the Ukraine 2014 corn crop forecast at 26.0 MMT. I hear that new crop Polish corn is offered around EUR170/tonne FOB the Baltic, with new crop Romanian material at around EUR153-154/tonne FOB Constanta. Europe has already authorised 13.6 MMT of corn for import so far this season, versus a USDA estimate of 13 MMT for the full marketing year. Jul 14 Corn closed at $4.59, up 10 cents; Sep 14 Corn closed at $4.56 1/4, up 12 cents. For the week Jul 14 corn was still 6 3/4 cents lower despite tonight's rise.

Wheat: The wheat market broke it's long recent run of almost continual decline with a double-digit short-covering rally. Even so, Chicago wheat was still lower on the week, although Minneapolis and Kansas managed gains of varying magnitude. The latest commitment of traders report shows managed money had liquidated almost it's entire remaining long position in Chicago wheat as of Tuesday night. Their net long is now little more than 1,000 contracts. Heavy rains in Kansas and Oklahoma are raising some yield quality concerns. Meanwhile, "cooling is predicted in the Canadian prairies and the Northern US Great Plains the next several days, a threat to late planted spring wheat and rapeseed. Temperatures are expected to drop 3-6 F below normal with a cool dry air mass dominating the area," said Martell Crop Projections. There's talk that Thailand bought 50,000 MT of US wheat this week. Other Asian buyers such as Bangladesh, Pakistan, Malaysia, the Philippines, Indonesia and Vietnam are said to be currently looking to the Black Sea for their wheat requirements. The Buenos Aires Grains Exchange said that planting of the Argentine 2014/15 winter wheat crop is 11.9% done versus 6.4% a week ago and 19.4% a year ago. Soil moisture profiles are very good, and a bumper crop is hoped for with plantings at 4.3 million hectares versus only 3.5 million a year ago. Informa yesterday estimated the US 2014/15 winter wheat crop at 1.396 billion bushels versus a previous estimate of 1.496 billion and 1.402 billion currently from the USDA. They now have the US 2014/15 winter wheat yield estimated at 42.6 bu/acre versus a previous estimate of 44.6 bu/acre. They have India's 2014 wheat crop estimated at a record 103.0 MMT, and China's at a record 123.5 MMT. Russia's 2014/15 wheat crop was estimated at 51.0 MMT, and Canada's at 29.3 MMT, both are unchanged from their previous estimates. Jul 14 CBOT Wheat closed at $6.18 1/4, up 12 1/2 cents; Jul 14 KCBT Wheat closed at $7.35 1/2, up 21 1/2 cents; Jul 14 MGEX Wheat closed at $7.09 1/4, up 18 3/4 cents. For the week that puts Chicago wheat down 9 cents, with Kansas up 12 1/2 cents and Minneapolis 2 3/4 cents firmer.