Nogger's Blog

14/10/14 -- Soycomplex: Beans closed sharply higher on what looks like fresh speculative buying. The seasonal lows are in, that seems to be what the market is thinking. "The funds are taking technical signals from yesterday and today and have turned buyers with big yields and big crops pretty well priced into the market and downside risk from current levels seems muted. And it seems this fund buying not just short covering but is new money entering the market as yesterday’s rally was accompanied by a 7,411 increase in open interest that at 820,956 lots is now approaching the 2012 record open interest of 833,271 contracts," said Benson Quinn Commodities. They estimated fund buying in beans at around a net 15,000 lots on the day. After the close the USDA said that this year's US soybean harvest was 40% done, which is better than many in the trade were expecting even if it is 13 points behind the 5-year average. Crop condition ratings were unchanged at 73% good to excellent. Weekly export inspections came in at an impressive 1.428 MMT. Plantings in Brazil are slow to get going with only 5.7% of the crop in the ground, according to Safras e Mercado. Nov 14 Soybeans closed at $9.64 3/4, up 19 1/2 cents; Jan 15 Soybeans closed at $9.73 1/4, up 20 cents; Oct 14 Soybean Meal closed at $366.00, up $22.60; Oct 14 Soybean Oil closed at 32.44, down 44 points. Both the latter two October contracts went off the board today, so the closes were a bit technical.

Corn: The corn market ended with strong gains for a second session. Funds were featured buyers, picking up an estimated 10-12,000 contracts on the day. South Korea's KOCOPIA bought 55 TMT of optional origin corn form March shipment. Coceral forecast the EU-28 corn crop at a record 72.79 MMT. That's up 15% from the 63.15 MMT produced last year, and also up sharply on their last estimate of 64.6 MMT in June and above the USDA's 71.02 MMT from Friday. They see the French corn crop at 16.66 MMT versus 14.47 MMT a year ago; Romania is at 11.35 MMT from 10.26 MMT in 2013; Hungary is at 8.98 MMT versus 6.72 MMT last year; Germany is at 4.8 MMT versus 4.07 MMT in 2013. After the close the USDA gave us their one day delayed crop progress report. That put the 2014 US corn harvest at 24% complete versus 17% a year ago. That was broadly in line with expectations, although it lags the 5-year average of 43% significantly. It would seem that US farmers have been more intent on harvesting their soybeans this past week, and with front end premiums to be had in beans who can blame them? US corn crop ratings were unchanged from a week ago at an historically high 74% good to excellent. They said that 87% of the crop was mature versus 89% for the 5-year average. Weekly export inspections for last week were decent enough at 933,788 MT. Dec 14 Corn closed at $3.57, up 11 cents; Mar 15 Corn closed at $3.70, up 11 1/2 cents.

Wheat: The wheat market closed higher on short-covering and spillover support from corn. Wet weather in southern Brazil is seen delaying the 2014 wheat harvest there, and also potentially harming yields and quality. "Approximately 60% of the wheat in Parana has been harvested and there are reports that the latest harvested wheat in the state is of lower quality. Very little of the wheat in Rio Grande do Sul has been harvested, but parts of the state have received even more rainfall than Parana. Over 90% of Brazil's wheat is produced in these two states," said Dr Cordonnier. "Conab is currently estimating that Brazil will import 5.5 million tons of wheat to meet the domestic demand of 12.2 million tons. If the wheat crop in Rio Grande do Sul turns out to be as poor as some are expecting, Brazil may end up importing a million tons more than the current estimate," he added. Coceral raised their estimate for the EU-28 soft wheat crop from 141.9 MMT to 147.93 MMT, up sharply on 136.45 MMT a year ago. After the close the USDA said that US winter wheat plantings for the 2015 harvest are 68% complete, up from 56% done a week ago and compared to the 5-year average of 67%. Emergence is at 43% versus 28% last week and 37% for the 5-year average. Weekly export inspections weren't great at 432,880 MT, well below both the previous week and a year ago. Dec 14 CBOT Wheat closed at $5.09 1/4, up 4 cents; Dec 14 KCBT Wheat closed at $5.90 1/4, up 6 cents; Dec 14 MGEX Wheat closed at $5.64 1/4, up 5 1/2 cents.