Nogger's Blog

05/09/14 -- Soycomplex: Beans closed sharply higher. Weekly export sales came in at net reductions of 87,700 MT on old crop and net sales of 869,000 MT on the new crop. These were in line with trade forecasts. As per usual, China (338,300 MT) and unknown destinations (293,100 MT) were the largest buyers on the new crop. Talk of a possible upcoming frost threat for the Northern Plains and Upper Midwest got a few people excited, and certainly may have prompted some short-covering ahead of the weekend. At this exact moment few see any serious damage being done to beans however. Informa Economica raised their forecast for the 2014 US soybean crop to 3.876 billion bushels versus 3.7 billion previously, with yields up to 46.1 bu/acre from 44.5 bu/acre. Whilst being above the USDA's 3.812 billion bushels and 45.4 bu/acre August forecasts, they are maybe not as high as they might have been. Lanworth, FCStone and Allendale have all been above those levels this week. Continuing with the "bearish, but not as bearish as expected" theme, Stats Canada pegged Canadian canola stocks on Jul 31 at 2.4 MMT. That's up sharply from only 0.59 MMT a year ago, but below the average trade guess of 3.0 MMT. The acute weakness of the Argentine peso following the country's July debt default means that Argentine farmers continue to hoard beans. The Argentine Ministry said that growers there have only sold 56.5% of their 2013/14 soybean crop versus 65.3% a year ago. Sep 14 Soybeans closed at $10.85 1/2, up 21 1/4 cents; Nov 14 Soybeans closed at $10.21 1/2, up 18 1/4 cents; Sep 14 Soybean Meal closed at $436.10, up $4.70; Sep 14 Soybean Oil closed at 32.35, up 38 points. For the week that puts old crop Sep 14 beans 4 cents lower, with new crop Nov 14 down 2 3/4 cents. Sep 14 meal fell $3.40 during the course of the week, with Sep 14 oil up 31 points.

Corn: The corn market closed with good gains to end the week, but as with soybeans was still lower overall compared with last Friday. Weekly export sales came in at negative 7,500 MT on old crop and 525,600 MT on new crop - the latter being at the low end of trade estimates. Nevertheless, it was the frost talk that probably was mostly responsible for the day's gains. The US corn crop is behind on the maturity front, and possibly stands to be harder hit than beans IF the frost talk verifies. Certainly the threat will have been enough to encourage some to book their profits and square up a few positions ahead of the weekend. As with beans, Informa raised their crop production estimates, but not as much as many of the other forecasts that have been around this week. They put the 2014 US corn crop at 14.281 billion bushels, versus a previous estimate of 13.988 billion bushels. They raised their corn yield estimate to 170.3 bu/acre from 168.0 bu/acre last month. The USDA were at a fraction over 14 billion bushels, and with yields at 167.4 bu/acre back in August. Other estimates this week have been in the 14.4-14.6 billion bushels region with yields at around 172-174 bu/acre. The USDA release their September forecasts next Thursday. The Buenos Aires Grain Exchange said that the Argentine 2013/14 corn harvest is almost across the line at 99% complete. They increased their forecast for production from 25.0 MMT to 25.2 MMT. The Argentine Ag Ministry indicated that it's not just soybeans that growers there are hanging onto as a hedge against raging inflation and the weak peso. They've only sold 65.5% of this year's crop versus 74.1% a year ago. The EU said that they'd issued 2 MMT worth of corn import licences so far this season, up sharply from 815 TMT this time last year. Europe is only expected to import 11 MMT of corn this season, down from 15.5 MMT a year ago, according to current USDA estimates. The pace of imports may drop off a little once the EU 2014 corn harvest begins. Sep 14 Corn closed at $3.46 1/2, up 10 3/4 cents; Dec 14 Corn closed at $3.56, up 9 1/2 cents. For the week Sep 14 corn still lost 12 1/2 cents.

Wheat: The wheat market closed higher on the day, but still lower in Chicago and Kansas for the week. The Minneapolis market gained on the week on the back of significant delays to the US spring wheat harvest, mixed with quality concerns following persistently wet conditions. The upcoming frost forecast could be a further threat for spring wheat on the northern Plains, and certainly on the Canadian Prairies. "Frost is predicted in the Canadian Prairies and as far south as northern North Dakota and Montana. Saskatoon, a key spring wheat area, is subject to frost or freezing conditions on 3 successive days September 9-11," said Martell Crop Projections. Early strength in wheat was also linked to reports that Russia may consider a grain export ban if shipments reached 26.9 MMT this season. The reports were essentially denied. Weekly export sales were extremely lacklustre at only 168,800 MT. That fell below the modest trade expectations of 250-500 TMT. The Rosario Grain Exchange said that Argentine wheat is in generally good condition, although dryness in some areas and a frost last week were an issue. Rain is in the forecast today and tomorrow though, which should alleviate the dryness concerns. They said that 38% of the crop is at the tillering stage, with 29% at stem elongation. The Buenos Aires Grain Exchange held steady with their estimate that Argentine farmers had planted 4.1 million hectares of wheat this year, up more than 13% on last year. They are said to have only currently sold 68% of their 2013/14 season harvest versus 99.7% this time a year ago. EU wheat exports are currently slightly ahead of last year at 4.6 MMT, despite the USDA forecasting a 20% year-on-year decline in 2014/15. Stats Canada estimated Canadian all wheat stocks as at Jul 31 at 9.8 MMT. That's up sharply from 5.02 MMT a year ago, and the largest in 20 years. It is however less than the market expected, with the average pre-report trade guess at 10.7 MMT. Sep 14 CBOT Wheat closed at $5.31 1/2, up 6 1/4 cents; Sep 14 KCBT Wheat closed at $6.19 3/4, up 11 1/2 cents; Sep 14 MGEX Wheat closed at $6.26 1/4, up 4 cents. For the week that places Chicago wheat 18 3/4 cents lower, with Kansas down 6 1/2 cents and the Minneapolis market up 11 1/4 cents.