Nogger's Blog

08/09/14 -- Soycomplex: Beans closed lower on all but the front month as frost fears eased, with weather models for the upcoming week trending warmer than they had been. A once again stronger US dollar was also a bearish factor. So too were concerns that China's economy is slowing, which put crude oil under pressure, dragging WTI to an 8-month low and Brent under $100/barrel for the first time in a year. China's July soybean imports were just over 6 MMT, down 19% versus 7.47 MMT in June and 5% lower than a year previously. They were however confirmed as buying 120 TMT of new crop beans by the USDA today under the daily reporting system. Weekly export inspections came in at 173,732 MT, of which 78,588 MT was for the new 2014/15 marketing year. The trade is starting to position itself for Thursday's upcoming WASDE report from the USDA. That is expected to forecast 2014/15 global soybean ending stocks at a record 87.24 MMT, up from the 85.62 MMT estimated last month. A Bloomberg survey has US 2014 soybean yields at an average of 46.3 bu/acre (record). The USDA were at 45.4 bu/acre in August. Production is estimated at 3.894 billion bushels (also a record) versus the USDA's 3.812 billion. Agroconsult estimated Brazil’s 2014/15 bean crop at a record 95.1 MMT versus a previous estimate of 94.0 MMT. They have Argentina's next crop at 56.6 MMT, which is also an all time high. After the close the USDA said that 72% of the US soybean crop is rated good to excellent, the same as a week ago, although there was a one point increase in the excellent category. They said that 12% of the crop is dropping eaves versus 17% for the 5-year average. Sep 14 Soybeans closed at $10.90 3/4, up 5 1/4 cents; Nov 14 Soybeans closed at $10.08 1/2, down 13 cents; Sep 14 Soybean Meal closed at $446.20, up $10.10; Sep 14 Soybean Oil closed at 32.03, down 32 points.

Corn: The corn market closed around 7 cents lower as Friday's "freeze premium" was taken back out again. As with beans, the firm US dollar was also a negative influence given that large exports will be needed to shift what is expected to be a record US corn crop this year. Exactly how large that will be the USDA are due to tell us on Thursday. A Bloomberg survey put average yields this year at a well above trendline 170.7 bu/acre. The USDA lined up at 167.4 bu/acre back in August. Various private estimates have production this year at a record 14.4-14.6 billion bushels, with the odd estimate even higher. The USDA were a fraction over 14 billion bushels last month. World 2014/15 ending stocks are seen rising from the 187.82 MMT forecast in August to 190.34 MMT this time round. Weekly US corn export inspections were good today at 1.197 MMT, up from 884 TMT the previous week and ahead of expectations for sales of 825,000–950,000 MT. APK Inform forecast Ukraine's 2014/15 corn exports at 26.3 MMT, a 15% fall versus 2013/14, although still a healthy number and the second highest on record. After the close the USDA said that US corn crop conditions held steady at 74% good to excellent, up sharply on only 54% this time a year ago. Maturity still lags though at 15% versus 26% for the 5-year average. They said that 69% of the crop is dented, slightly behind 74% normally at this time, with 95% of the crop at or past the dough stage versus 94% on average. This lateness in maturity might just be enough to continue to jangle one or two nerves ahead of harvesting in the Upper Midwest, we will probably see at least one or two more frost scares yet. For now though the trade seems to view the areas most likely to be hit as relatively minor corn growing regions - northeastern Montana and western North Dakota near the Canadian border. Sep 14 Corn closed at $3.39 1/4, down 7 1/4 cents; Dec 14 Corn closed at $3.48 1/4, down 7 3/4 cents.

Wheat: The wheat market closed a bit firmer. The areas where frost is forecast might not be big corn or soybean producing regions, but there's plenty of spring wheat grown there, not to mention across the border in Canada. Harvesting of that is only 58% complete nationally, versus 74% normally, the USDA said tonight. In North Dakota the harvest is only 42% done compared to 74% for the 5-year average. Spring wheat crop conditions were cut by 3 percentage points from last week to 60% good to excellent. That makes for a 9 percentage point reduction across the past 4 weeks. Winter wheat planting for the 2015 harvest was said to be 3% complete versus 4% on average at this time. Morocco are tendering for up to 386,600 MT of US soft wheat, along with 330,000 MT of US durum wheat, all for Dec shipment. Iran bought 200,000 MT of optional origin wheat. Algeria seeks 50,000 MT of optional origin milling wheat for Dec shipment. ABARES estimated the 2014/15 Australian wheat crop at 24.23 MMT versus a previous estimate of 24.59 MMT. IKAR said Russia had exported a record 4.7 MMT of grain in August. Most of that, 4.2 MMT, was wheat (also a record). The Ukraine Ag Ministry said that the country had exported 5.98 MMT of grain between July 1st – Sept 8th, up 44% from a year ago. APK Inform said that the 2014 Ukraine wheat harvest would total 23.3 MMT, a 5% increase on a year ago. They see barley production up 18% to 8.9 MMT. They forecast winter grain plantings in Ukraine at 8.26 million hectares, down only marginally on last year's 8.31 million. They see winter wheat plantings at 5.98 million ha (down 1.6%) and those of winter barley at 1.11 million ha (up 0.3%). They did suggest though that up to 35% of land traditionally planted with winter grains in the troubled Donetsk and Lugansk regions may go unseeded. Trade forecasts for Thursday's USDA world wheat ending stocks in 2014/15 are seen at an average 193.75 MMT versus 192.96 MMT last month. Weekly US wheat export inspections of 530,773 MT were in line with the expected 550-675 TMT. Sep 14 CBOT Wheat closed at $5.33 1/2, up 2 cents; Sep 14 KCBT Wheat closed at $6.25, up 5 1/4 cents; Sep 14 MGEX Wheat closed at $6.27, up 3/4 cent.