Nogger's Blog

26/06/14 -- Soycomplex: Beans closed higher, with the best gains at the front end. Yet again, old crop export sales defied expectations, coming in at 317,200 MT with "unknown" the biggest taker. There were also net sales of 457,700 MT for 2014/15, with the largest buyers China (247,000 MT) and unknown destinations (170,000 MT). Weekly shipments were only 98,200 MT however. Not that they need to be large, accumulated shipments to date are now only 7 million bushels away from the USDA forecast for the season. Total net commitments on beans are 104% of the USDA forecast for 2013/14. The IGC forecast the world soybean crop at 300 MMT in 2014/15, up 17 MMT from this year, a 6% increase and a record volume. They said that consumption will grow 4% to 293 MMT. Ending stocks will rise from 28 MMT this season to 35 MMT next. They see record production from the US (98.9 MMT), Brazil (91 MMT) and Argentina (55 MMT) in 2014/15. They also see Chinese soybean imports rising from 68 MMT this season to a new record 71 MMT next. The IGC also said that "rapeseed/canola output in 2014/15 is forecast to fall by 3% from the previous year’s record, with better EU and Black Sea outturns outweighed by a smaller Canadian crop." For rapeseed next season they see a 2% increase in use and a 12% drop in end-season stocks. Trade estimates for the Monday's USDA Acreage report average 82.2 million, with Jun 1 stocks at around 380 million bushels. Before that we have Stats Canada's Acreage report tomorrow, there's some suggestion that the canola area might be up from the April forecast of 19.8 million acres due to a switch away from wheat. Jul 14 Soybeans closed at $14.37, up 21 1/4 cents; Nov 14 Soybeans closed at $12.44 1/4, up 15 1/4 cents; Jul 14 Soybean Meal closed at $465.50, up $13.80; Jul 14 Soybean Oil closed at 40.51, down 14 points.

Corn: The corn market closed around 2-3 cents firmer. Weekly old crop export sales came in at 321,400 MT, along with a further 232,100 MT of new crop. Trade estimates were for 150-300 TMT of old crop and 200-300 TMT of new crop sales. Weekly shipments were in excess of 1.15 MMT. Total net commitments are now 97% of the USDA forecast for the season. There are said to be around 250 TMT of outstanding corn sales to China and a further 2 MMT or so to unknown destinations. Whether those sales will be fulfilled, switched, cancelled or carried over into 2014/15 is uncertain. The IGC forecast the 2014/15 global corn crop at 963 MMT, an 8 MMT increase on last month, although still down by 9 MMT on last year's record. The monthly increase is "mainly reflecting improved prospects in China" where production is now estimated at 220 MMT, cutting imports back to 3.5 MMT. Consumption will be 950 MMT in the year ahead, with ending stocks totalling 180 MMT versus the 172 MMT forecast previously and 167 MMT at the end of 2013/14. Dr Cordonnier said that the Mato Grosso safrinha corn harvest is 5% complete, with Parana 2% done. These are the two leading Brazilian second crop corn states. He said that IMEA were suggesting that the average yield in Mato Grosso could rise from a previous estimate of 87 sacks/ha to around 94.5 sacks/ha. The outlook for a second bumper corn crop in the state, which is far away from the ports, means that local prices dropped more than 10% last week to the equivalent of only around $3/bu. Prices in Parana are down from $4.75 in March to close to $4/bu now that the safrinha harvest has started, he added. The average guess for June 1 US corn stocks on Monday is 3.72 billion bushels, with the 2014 planted acreage number expected to be a little over 91.7 million. 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. Jul 14 Corn closed at $4.42 3/4, up 1 3/4 cents; Sep 14 Corn closed at $4.39, up 3 1/4 cents.

Wheat: The wheat market closed around 5 to 7 dents higher across the three exchanges. Weekly export sales of 359,400 MT were in line with trade estimates, if nothing more than routine. Buyers were a mixture of the regular Asian homes, plus other nearby destinations and Brazil (64,300 MT). Total commitments for the new 2014/15 season are around 29% of the USDA forecast, which is a bit above average. The IGC forecast the world 2014/15 wheat crop at 699 MMT, up 5 MMT from last month but still 11 MMT below last year's record. The extra production was due to increases for China, the EU and India. China's crop was raised from 120 MMT to 122 MMT, with Europe's up from 144.9 MMT to 146.8 MMT and India's increased from 95 MMT to 95.9 MMT. Russia's crop was left unchanged at 51 MMT, along with Ukraine's at 20 MMT. There were increases for wheat exports from Europe (up 0.5 MMT to 27.3 MMT), Russia (up 0.7 MMT to 17.2 MMT) and the US (up 0.5 MMT to 26.5 MMT). All of those figures are still less than each is expected to export in 2013/14 however. World wheat consumption in 2014/15 was seen close to the level of production at 697 MMT, although that's down 1 MMT from last month. World 2014/15 ending stocks were forecast 7 MMT higher than a month ago and up 2 MMT on 2013/14 at 194 MMT. 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. For June 1 stocks, the average trade forecast is 598 million bushels. 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. Jul 14 CBOT Wheat closed at $5.82 1/4, up 6 3/4 cents; Jul 14 KCBT Wheat closed at $7.21, up 7 cents; Jul 14 MGEX Wheat closed at $6.79, up 5 1/4 cents.