Nogger's Blog

04/08/14 -- Soycomplex: Beans closed higher as the latest weather forecasts adopted a drier look for the week ahead, unlike last week's wetter prognosis. "Surplus soil moisture in early July has given way to dry ground in August in the Midwest. There was virtually no rain last week in the US heartland. Field moisture was ample to begin with early in July, but now has become severely depleted. Soybeans are most in jeopardy for a reduced yield as the key pod filling period advances in August. August rainfall is the key indicator for the soybean yield, the heaver the rainfall the better. Conditions in corn and soybeans have remained remarkably favourable despite very low rainfall and strong drying in recent weeks. Exceptionally cool temperatures were beneficial keeping evaporation low. Yet over time field moisture has declined with very low rainfall," said Martell Crop Projections. The USDA then surprised the trade after the close, revealing unchanged good to excellent soybean ratings of 71%. They said that 57% of the crop was setting pods, up from 38% a week ago and 9 points ahead of the 5-year average. Separately the USDA announced 102,000 MT of US beans sold to Taiwan for 2014/15 shipment, along with 110,000 MT sold to China. FCStone estimated US soybean yields at 46 bu/acre. Informa are due to release their latest forecasts tomorrow. Strategie Grains estimated the 2014 US soybean crop at a record 101 MMT (3.71 million bushels), up 1 MMT from their previous estimate. They also see record EU-28 rapeseed production this year, forecasting a crop of 22.9 MMT, up 400 TMT from their previous forecast and 8.5% higher than 21.1 MMT a year ago. Weekly US soybean export inspections of 39,256 MT were below the expected 50,000-115,000 MT. Aug 14 Soybeans closed at $12.32 1/2, up 17 1/2 cents; Nov 14 Soybeans closed at $10.79 1/2, up 21 cents; Aug 14 Soybean Meal closed at $388.20, up $0.70; Aug 14 Soybean Oil closed at 36.02, up 57 points.

Corn: The corn market closed around 6-7 cents higher. A drier August outlook for the Midwest is not likely to be as damaging for corn as it could be for soybeans, although nevertheless a drink would be nice. "Most of the Midwest corn pollinated under favourable conditions, though conditions were too dry for last 35-40% of pollinating crop," said Martell Crop Projections. Short-covering and spill over support from wheat probably helped corn today. So too did another round of robust weekly export inspections. These came in at 1.14 MMT versus trade expectations of 750-950 TMT. After the close the USDA confirmed trade expectations with a 2 point drop in corn crop ratings to 73% good/excellent, although that's still a very impressive figure for this time of year. They said that 90% of the crop is now silking versus 78% a week ago, 84% a year ago and 88% for the 5-year average. They also said that 36% of the crop is now at the "dough" stage versus 17% a week ago and this time last year. The 5-year average is 29%. It would seem that the cool temperatures witnessed throughout July haven't necessarily held back crop development on a national level, pushing the harvest forward and increasing the risk of frost damage a bit later in the season. All the leading corn producing states appear to be displaying maturity ahead of normal. Some northern states like Michigan, Wisconsin and North Dakota are behind normal development though. FCStone estimated US 2014 corn production at a record 14.455 billion bushels, with an average yield of 172.4 bu/acre. The yield figure includes a 203 bu/acre state average for Illinois. "The 6-10 day forecast calls for continuing coolness, a threat for late-maturing Midwest crops. Rainfall chances would be near normal August 9-13 on most Midwest farms, though less wet in the eastern Midwest with a 40-50% chance of rain," said Martell Crop Projections. Sep 14 Corn closed at $3.58 3/4, up 6 1/4 cents; Dec 14 Corn closed at $3.69 1/4, up 7 cents.

Wheat: The wheat market ended higher on short-covering prompted by ideas that Europe's 2014 crop will be down on quality. That would potentially open the door for more US wheat exports, although competition from Russia in particular remains fierce. There's little sign as yet of Western sanctions against the latter are having any effect on the global wheat trade. Russia's Ag Ministry said that grain exports in the first 30 days of the new 2014/15 marketing year totalled 2.827 MMT, a 17.5% rise on a year ago. Wheat accounted for the vast majority of that - 2.436 MMT, they said. Russian analysts IKAR trumped last week's forecast from ProZerno for a wheat crop of 58.2 MMT this year, coming up with a new estimate of 58.5 MMT, which is 1 MMT higher than their previous forecast and a 6-year high. The Russian Ministry said that the country had already harvested more than 40 MMT of wheat in bunker weight off only 44% of the planned area. IKAR forecast Russia's 2014/15 wheat exports at 22 MMT or more. In Brazil, the world's third largest wheat buyer according to the USDA, Conab said that the crop in Parana state was 85% in good condition, with 12% satisfactory and only 3% poor. They expect Parana's wheat crop to come in at 3.8 MMT this year, a sharp increase on only 1.8 MMT a year ago. In Rio Grande do Sul however heavy rains mean that output this year will fall to 3.0 MMT from 3.2 MMT in 2013/14. The two states account for the vast majority of Brazil's wheat production. The USDA said that the 2014/15 US winter wheat harvest was now 90% complete, up from 83% a week ago and versus 85% for the 5-year average. US spring wheat crop conditions were pegged at 70% good/excellent, unchanged on a week ago and 2 points ahead of this time last year. They said that 97% of the crop was headed, which is exactly in line with the norm. Weekly export inspections of 351,503 MT were at the bottom end of trade expectations. Sep 14 CBOT Wheat closed at $5.44, up 9 3/4 cents; Sep 14 KCBT Wheat closed at $6.38 1/2, up 5 3/4 cents; Sep 14 MGEX Wheat closed at $6.23 1/2, up 7 1/2 cents.