Nogger's Blog

24/06/14 -- Soycomplex: Beans closed lower, in Turnaround Tuesday style. Profit-taking and book-squaring ahead of Monday's acreage and stocks numbers from the USDA may have been a feature. Monday is also first notice day on the July future, and remaining spec longs won't want to be getting caught having to take delivery. Benson Quinn suggest that there is "little incentive by the speculator to trade the August or Sept contracts due to low volume," so that they may now be forced to look at the more liquid Nov 14 new crop future if they wish to continue to participate in the soybean pit. That's a whole different kettle of fish to speculating on the old crop, as we could/should have a record large US soybean crop already in the bin by then. We may be staring down the barrel of potentially record Brazilian (and maybe even Argentine also) plantings also. Another bearish factor was the news that China only sold 44,741 MT, or 12.6%, of the 354,726 MT of soybeans it had up for auction today. Last night's news that US soybean good/excellent crop conditions had fallen by one percentage point to 72% was also seen as bearish, as a 2-3% cut was what the market was expecting. Dr Cordonnier left his 2014 US bean yield estimate unchanged at 45.0 bu/acre, but said that he may lower this if the current wet and cool conditions continue much longer. Jul 14 Soybeans closed at $14.13 1/2, down 11 1/4 cents; Nov 14 Soybeans closed at $12.24 1/2, down 9 1/4 cents; Jul 14 Soybean Meal closed at $448.40, down $7.40; Jul 14 Soybean Oil closed at 40.97, up 29 points.

Corn: The corn market ended 1-2 cents lower. Yesterday's cut of 2 percentage points to 74% good to excellent for the 2014 US corn crop was not as bad as some had feared. It was also better than 65% good to excellent a year ago and 68% for the five year average at this time. China are seen producing more corn, and importing less of it, in 2014/15. CNGOIC pegged the Chinese corn planted area at 36.7 million hectares, up 1.1% from a year ago. They see production at 223.0 MMT up 2.1% from a year ago. They forecast Chinese 2014/14 corn imports at only 3.5 MMT, down 12.5% versus this season. Chinese corn demand was estimated at 194.0 MMT, up 3.8% from a year ago but well below the forecast level of production. The Chinese government are to attempt to auction 5 MMT of corn from reserves over the next couple of days. A similar auction last week met with only a tepid response. Dr Cordonnier left his 2014 US corn yield estimate unchanged at 165.0 bu/acre. Benson Quinn report that US DDG's prices have fallen by $100/ton since China said it was banning their import from the US on GMO concerns. "New export markets for DDG's could develop at cheaper values, but right now they’re a cheap alternative to corn and in most cases meal in the domestic market," they said. Taiwan Sugar Corp are said to be tendering for 20,000 MT of US corn for August shipment. Jul 14 Corn closed at $4.43, down 1 1/2 cents; Sep 14 Corn closed at $4.36 3/4, down 2 1/4 cents.

Wheat: The wheat market closed around 8-9 cents lower across the three exchanges. Fresh news was lacking, and the path of least resistance remains lower. Chicago wheat was last this low back in early February, prior to the Crimea-led fund buying spree. CNGOIC forecast China's 2014/15 wheat output at 122.5 MMT, up 0.5% from a year ago. Brazil said that they will scrap the usual 10% import duty on wheat bought from outside the Mercosur trade bloc to allow up to 1 MMT of imports by Aug 15. They've been big buyers of US wheat over the last 12 months after last year's poor wheat production year in South America. That could all change in 2014/15 though, with a much larger wheat planted area in both Brazil and Argentina. The wheat harvest in Brazil normally begins on October, and in Argentina it's a month later. Various trade forecasts continue to suggest a bumper wheat production year in Europe, although there are some dryness concerns in parts of France. Bulgaria and Romania face the opposite problem, it's too wet. That will delay the harvest there at the very least, but may also take the shine off yields and quality. Russia’s Ag Ministry said that the country has exported 25.7 MMT of grain between July 1 – June 20th, including 18.2 MMT of wheat. Jordan retendered for 100,000 MT of optional origin barley for Dec/Jan shipment. Algeria bought 200,000 MT of optional origin durum wheat (thought possibly from Canada, Mexico and/or France) for Oct-Nov shipment. Jul 14 CBOT Wheat closed at $5.71, down 8 3/4 cents; Jul 14 KCBT Wheat closed at $7.05 1/2, down 8 1/2 cents; Jul 14 MGEX Wheat closed at $6.76 1/2, down 8 3/4 cents.