Nogger's Blog

09/09/14 -- Soycomplex: Beans closed below $10/bu on the benchmark new crop Nov 14 contract, and indeed on the Jan 15 as well, to set fresh contract lows. So too did Dec 14 meal, although the soon to expire old crop Sep 14 manages to defy gravity. The USDA announced 120,000 MT of US beans sold to unknown for 2014/15 shipment, but that's just routine business. The trade is acknowledging that there's a deluge of new crop beans on the way. Early yields from the south remain highly favourable. Anecdotal reports suggest the killer combination of higher pod counts, containing larger than normal beans, thanks to a wet and cooler than normal summer. The crop looks so good one Iowa farmer estimated that this year 2,300 beans will weigh one pound (0.45 kilogram) on his farm, compared with 3,000 in a normal year, according to a report on Bloomberg. Private production estimates are getting ever close to a bin-busting 4 billion bushels. Linn Group today estimated the US 2014 bean crop at 3.959 billion bu, up from a previous estimate of 3.849 billion and nearly 4% above the USDA's August estimate of 3.812 billion. The USDA will update us in what is looking like a very interesting September report tomorrow. Not only is the US crop now looking almost certain to be huge, they're about to start planting another potentially record crop in Brazil, followed up by one in Argentina too later in the year. In Brazil, the Parana Secretary of Agriculture said that growers there would plant a record large soybean area of in excess of 5 million hectares this year. Production could be up 18% in the state to 17.1 MMT if the weather co-operates, they said. No wonder then that the trade remains highly sensitive to any sign of a slowdown in demand from China, who are expected to account for two thirds of all global soybean trade in 2014/15. Conab today released their final 2013/14 Brazilian crop production estimates, pegging the soybean crop at 86.12 MMT versus a previous estimate of 85.7 MMT. AgroConsult estimated Brazil’s 2014/15 soybean area at 31.6 million ha, up 5% versus 30.1 million a year ago. Sep 14 Soybeans closed at $10.76 1/2, down 14 1/4 cents; Nov 14 Soybeans closed at $9.92 3/4, down 15 3/4 cents; Sep 14 Soybean Meal closed at $453.70, up $7.50 (new crop was around $4-5 easier); Sep 14 Soybean Oil closed at 31.59, down 44 points.

Corn: The corn market closed around 3-4 cents lower as the threat of a perceived frost risk was pared back some more. As with beans, there's a giant US corn crop coming by the looks of things, with Linn Group today estimating that at 14.671 billion bushels versus a previous estimate of 14.518 billion and almost 5% higher than the USDA's 14.032 billion. Last night's crop ratings of 74% good to excellent in the US corn crop were said to be the highest on record at this time. Israel bought 80,000 MT of Ukrainian corn in a tender. Conab estimated the final 2013/14 Brazilian corn crop at 79.91 MMT versus a previous estimate of 78.55 MMT. The French Ministry estimated their 2014 corn crop at 16.374 MMT, up 8.9% versus 15.030 MMT in 2013. The corn harvest in Russia and Ukraine is just getting going. Global demand for US corn remains limited by strong competition from the likes of the Black Sea, not to mention a buoyant US dollar and a much larger than normal supply of feed wheat on the market this year. The old adage that ultimately the cure for low prices is low prices might yet take some time to work its magic. The Parana Secretary of Agriculture, who is forecasting record high soybean plantings this year, is also estimating full season corn sowings at a record low of only 572,600 ha in the state, almost 9 times smaller than the area being given over to soybeans in 2014/15 and a 14% decline versus last year. "Depending on the eventual safrinha corn acreage, approximately 10% to 20% of the corn in Parana will be full-season production and 80% to 90% will be safrinha production," noted Dr Cordonnier. "New lows for the move added to the bearish stance that already exists in the technical structure. Momentum studies point to a market that looks for the next downside objective and works its way in that direction. The corn market is migrating into oversold territory, but not grossly oversold," said Benson Quinn Commodities. Sep 14 Corn closed at $3.36 1/4, down 3 cents; Dec 14 Corn closed at $3.44 1/4, down 4 cents.

Wheat: The wheat market closed generally around 5-6 cents lower. "Frost and freezing conditions developed early this morning in western Alberta and central Saskatchewan, but severe damage to the wheat crop is not expected. Near-average growing degree days this season would indicate that spring wheat is virtually ripe and ready for harvest. Had freezing temperatures occurred much earlier, grain quality may have been impaired," said Martell Crop Projections. "Northern spring wheat in upper North Dakota and Montana are expecting frost and freeze conditions both Thursday and Friday mornings. Freezing conditions may not be damaging as wheat is virtually ripe and ready for harvest. Delays in harvesting have resulted from cool summer temperatures and ample rainfall that also increased the yield potential. North Dakota, the US second leading wheat state, is expected to make 47 bushels per acre in the new harvest, setting a new record for spring wheat yields," they added. "Quality and transportation remain the critical issues with the trade at the moment, with the portion of the (US spring wheat) crop that came off this weekend not as poor as many had feared as far as vomitoxin and falling numbers," said Benson Quinn Commodities. Israel bought 50,000 MT of Ukrainian feed wheat in a tender. Japan seeks 109,800 MT of milling wheat for Oct-Nov shipment in it's regular weekly tender. As normal, the business is expected to be split between US, Canadian and Australian origin wheat. Conab estimated the 2014 Brazilian wheat crop at 7.67 MMT versus a previous estimate of 7.50 MMT. The French Ministry estimated their 2014 soft wheat crop at 37.527 MMT, up 1.8% from 36.867 MMT a year ago. Russia said that it had now harvested 83 MMT of grains so far this year off 66% of the planned area. Wheat accounts for 51.1 MMT of that total, also off 66% of plan. Sep 14 CBOT Wheat closed at $5.27 1/2, down 6 cents; Sep 14 KCBT Wheat closed at $6.13, down 12 cents; Sep 14 MGEX Wheat closed at $6.24 1/4, down 5 3/4 cents.