Nogger's Blog

30/05/14 -- Soycomplex: Beans closed lower on the day, and lower for the week despite supportive weekly export sales. The outlook for further good progress to have been made this week with US plantings maybe usurped that. Weekly export sales report for beans were expected to be around zero on old crop and maybe around 500 TMT on new crop. The actual numbers revealed sales of 60,300 MT on old crop and sales of 821,100 MT for 2014/15 delivery. Unknown destinations (388,000 MT) and China (358,000 MT) were the big takers on new crop. Exports of 119,300 MT take the 2013/14 marketing year total shipments to 42.7 MMT, with a further 2.2 MMT of outstanding sales, taking total commitments for the season to 44.9 MMT versus a USDA forecast of 44.2 MMT. The trade is expecting that around 80% of the US 2014 soybean crop could be planted by Sunday night, up from 59% a week ago and well ahead of 57% this time last year. The incentive to plant beans is there for all to see. Agroconsult forecast Brazilian 2014/15 plantings at a record 31.2 million hectares (77.4 million acres), which would be up 4% versus 2013/14. They suggest that production could reach a new record 94 MMT. The Buenos Aires Grains Exchange said that the Argentine soybean harvest is 73.8% done, up only 3.9% on a week ago and 22.3% down on this time a year ago. They stood by their harvest estimate of a record 55.5 MMT. The Rosario Grain Exchange said that nationally the Argentine soybean crop is only averaging 37.19% protein and 22.66% oil, meaning that this record crop could be difficult to sell whether as beans or meal (which is also likely to be low in protein). With old crop prices holding up at traditionally high levels, and potentially record soybean crops getting planted everywhere to take advantage of these lofty levels, the market looks to have significant downside barring a significant summer weather problem in the US. Although we all thought that last year too! Jul 14 Soybeans closed at $14.93 1/4, down 5 3/4 cents; Aug 14 Soybeans closed at $14.24 1/2, down 8 1/4 cents; Jul 14 Soybean Meal closed at $500.20, up $1.80; Jul 14 Soybean Oil closed at 38.50, down 91 points. For the week that puts beans down 22 1/4 cents, with meal off $2.40 and oil sliding 188 points.

Corn: The corn market ended around 4-6 cents lower on the day. Trade estimates for the USDA weekly exports sales report were a combined 450-850 TMT for both marketing years. The actual figures were 621,300 MT of old crop and 90,900 MT of new crop. It was noted that the old crop activity included cancellations of 155,900 MT for unknown and a further 115,000 MT for China. Exports of 1,210,200 MT were up 4 percent from the previous week. The total shipped so far this season is now 32.65 MMT, with a further near 13 MMT of outstanding sales. Combined that's 45.6 MMT of commitments against a USDA forecast for the season of 43 MMT. Note though that a much larger percentage of these commitments are unshipped than is the case for soybeans. There's still no sign of the disputed MIR 162 corn variety being approved for shipment into China, a situation that has now been dragging on since late last year, effectively halting virtually all US corn shipments to the country. China sold 1.8 MMT, or 53%, of the 3.5 MMT of corn stocks offered at yesterday’s auction. South Korea's KFA bought 60 TMTs of optional origin corn for Dec shipment. The Buenos Aires Grains Exchange said that the corn harvest in Argentina is 35.8% complete versus 33.1% a week ago and 48.8% a year ago. They estimated production at 24.0 MMT, unchanged from their previous forecast. Russian and Ukraine corn planting is well advanced and both seem confident of another bumper production year One report from southern Russia said that the corn crop there was currently in "as good a condition as I've ever seen it" - despite all the drought talk. Meanwhile in France, corn planting is just about completed. Fully 97% of the crop is "lifting" against 77% a year ago, and 30% of the crop has at least 6-8 leaves visible versus only 4% a year ago. "An emerging El Niño in the tropical Pacific Ocean would influence the weather in the Great Plains and Midwest, mostly in a positive way. Sudden heavy rainfall last week in Texas and Oklahoma, 4-5 inches, was a symptom of a growing El Niño influence. Week to week weather conditions would not necessarily reflect the El Niño signal. That is because the El Niño is a 'climate anomaly' not reflecting changing weather, week to week. Heartland temperatures last week were above normal, contrary to coolness with El Niño . Yet the new rainfall forecast is very wet in the Midwest and northern Great Plains, and consistent with the El Niño signal," said Martell Crop Projections. Jul 14 Corn closed at $4.65 3/4, down 3 3/4 cents; Sep 14 Corn closed at $4.58, down 5 1/4 cents. For the week Jul 14 corn was 12 1/4 cents lower.

Wheat: The market closed lower once more, as it now has done for 16 of the last 17 sessions, and also posted it's worst monthly performance since September 2011 whilst it was about it. Weekly export sales showed net reductions of 52,400 MT on old crop, and were 531,500 MT for 2014/15 delivery. Trade estimates were for combined sales of 200-600 TMT. With one week of the 2013/14 marketing year left to go the US has exported just shy of 29.5 MMT of wheat this season versus a USDA target for the year of 31.5 MMT. Outstanding old crop sales are nearly 2.3 MMT, but shipments this week were only 529,100 MT so it looks pretty likely that the US is going to finish 2013/14 falling short of the USDA estimate by around 1.5 MMT. Not all of the US winter wheat crop is in terrible shape. The Illinois Wheat Association's state wheat tour said that the southern Illinois soft red winter wheat average yield potential is 64.68 bu/acre versus 61.60 bu/acre a year ago and 62.0 bu/acre for the five year average. Harvesting is probably 3-4 weeks away. They will also be harvesting winter wheat in southern Russia by then too. A contact over there told me "what's good is very good, but a lot of it is also not so good." However "for sure our harvest will be better than last year, but by how much anyone's guess," he added. The head of Ukraine's state weather forecasting centre's agriculture department said that grain production there this year could even beat last season's record 63 MMT, despite the loss of Crimea. Harvesting there is also not very far away, and crops are said to be in generally good/very good shape. Exports in 2014/15 are now expected to be roughly equal to the record levels of this season, contrary to expectations a few months ago. FranceAgriMer today said that 93% of the French winter wheat crop is headed compared to only 31% a year ago at this time. They left the crop at 75% good/very good, unchanged on a week ago but significantly better than 67% a year ago. Their harvest too is drawing ever closer, and will certainly be at least 2 weeks earlier than last year, and probably more. Wetness means that plantings in Western Canada are however behind schedule at roughly 75-80% done versus 90% normally at this time, according to a report on Reuters. Egypt said that it had bought around 3.5 MMT of wheat on the domestic market so far this new season. The government target is to buy 4.4 MMT. Jul 14 CBOT Wheat closed at $6.27 1/4, down 5 1/4 cents; Jul 14 KCBT Wheat closed at $7.23, down 7 1/2 cents; Jul 14 MGEX Wheat closed at $7.06 1/2, down 8 cents. For the week that puts Chicago wheat down 25 1/4 cents, with Kansas down 22 cents and Minneapolis losing 19 cents.