Nogger's Blog

23/07/14 -- Soycomplex: Beans closed with some decent gains on talk of a drier pattern developing in the 6-10 day and 8-15 day weather outlooks. August is the most important pod-setting month for determining US soybean yields. The weather has been kind up until now, and prices have slumped to 2 1/2 year lows, so even the slightest hint of a weather scare will be enough to cause a few ripples. China only sold sold 54,945 MT out of the 354,470 MT of soybeans on offer in yesterday's government auction. With US soybean prices having tumbled lately I suspect that Chinese buyers would prefer to buy "fresh" supplies rather than government stocks that have been around for some considerable time. Doane’s crop tour continues to indicate very high yield potential in the western belt. Dr Cordonnier was said to have estimated US 2014 soybean yields at 45.0 bu/acre, unchanged from his previous estimate. Lanworth were said to have estimated US yields at 45.2 bu/acre with production at 3.671 billion bushels. Ag Canada estimated the canola crop there this year at 14.5 MMT versus a previous estimate of 14.8 MMT and down 19.4% versus 18.0 MMT in 2013. They now see 2014/15 canola ending stocks at 1.1 MMT versus a previous estimate of 1.7 MMT and compared to 3.0 MMT at the end of 2013/14. Trade estimates for tomorrow's weekly export sales report for soybeans are 150-250 TMT of old crop and 1.2-1.4 MMT of new crop, with China buying the latter quite heavily. Aug 14 Soybeans closed at $12.01, up 17 cents; Nov 14 Soybeans closed at $10.76 1/2, up 18 3/4 cents; Aug 14 Soybean Meal closed at $391.50, up $9.70; Aug 14 Soybean Oil closed at 36.20, up 27 points.

Corn: The corn market closed a couple of cents higher in sympathy with beans. The potential for a drier beginning to August isn't seen as much of a threat to corn, as July is a more important month in determining final yields. The ongoing Doane crop tour is reporting back some fantastic yield potential. Lanworth upped their forecast for US 2014 corn yields to a record 172.8 bu/acre versus a previous estimate of 172.1 bu/acre. They see the average Illinois corn yield at 204.9 bu/acre, with Iowa coming in at 193.8 bu/acre. They now forecast the US 2014 corn crop at a record 14.635 billion bushels versus a previous estimate of 14.562 billion, despite lower plantings this year. Dr Cordonnier was said to have gone for a more modest 167.0 bu/acre, unchanged from his previous estimate. IMEA estimated Mato Grosso’s 2013/14 corn crop at 17.1 MMT versus a previous estimate of 15.0 MMT. They said that the state's safrinha corn harvest is about a third done. Ag Canada forecast the 2014 Canadian corn crop at 11.3 MMT versus a previous estimate of 12.4 MMT and compared to 14.2 MMT in 2013/14. They now have 2014/15 ending stocks estimated at 1.9 MMT versus a previous estimate of 2.7 MMT and compared to 3.1 MMT at the end of 2013/14. The US Energy Dept said ethanol production in the States this past week was 959,000 barrels/day, up 16,000 bpd from the previous week and the second largest week of the year. EU corn closed at 4 year lows on ideas that a greater proportion than normal of the EU wheat crop may only be suitable for animal feed this year. Trade estimates for tomorrow's weekly export sales report are around 300-500 TMT of old crop and 400-600 TMT of new crop. Sep 14 Corn closed at $3.62 1/2, up 2 1/4 cents; Dec 14 Corn closed at $3.70 3/4, up 2 1/2 cents.

Wheat: The wheat market closed with modest gains in consolidation trade following recent heavy losses. Egypt's GASC bought 235 TMT of Black Sea wheat. They booked two cargoes of Russian origin, along with one each of Romanian and Ukraine wheat for early September shipment. The average price paid was around $4/tonne cheaper than the price they last bought at two weeks ago. US wheat wasn't offered, and neither was French origin. There's widespread talk of this year's French wheat crop suffering quality downgrades. There's rumblings that German's crop may also see some rain-related damage. Earlier this month the USDA said that this year's poor US winter wheat crop production would be more than compensated for by a rise in spring wheat output. A crop tour in southern parts of North Dakota (which produces around 46% of the US spring wheat crop) found an average yield potential of 48.3 bu/acre versus 43.3 bu/acre in 2013 and the tour’s five-year average of 42.9 bu/acre. "I think we have seen an extraordinary crop," said one tour participant. The USDA currently rates spring wheat crop conditions in the state as 82% good to excellent, whilst neighbouring South Dakota is 80% G/E. Russia's 2014 wheat harvest is said to be 30.7% done at 28 MMT, with average yields up 16% at 3.6 MT/ha. Ag Canada estimated the 2014 Canadian all wheat crop at 27.7 MMT versus a previous estimate of 29.6 MMT and compared to last year's record crop of 37.5 MMT. They have all wheat ending stocks estimated at 9.2 MMT, unchanged from their previous estimate and down from 10.9 MMT at the end of 2013/14. Trade estimates for tomorrow's weekly export sales report are a fairly modest 350-500 TMT. Sep 14 CBOT Wheat closed at $5.30 3/4, up 6 1/4 cents; Sep 14 KCBT Wheat closed at $6.23 1/2, up 2 1/4 cents; Sep 14 MGEX Wheat closed at $6.21, up 2 1/4 cents.