Nogger's Blog

13/10/14 -- Soycomplex: Beans rallied strongly, regaining all of Friday's losses. Harvest delays were the reason, now that the October WASDE report is out of the way. The US dollar was a little lower today, which also added some support. Unfortunately the usual Monday night crop progress report was missing tonight due to the Columbus Day holiday. The USDA will release that tomorrow. Trade talk suggests that the 2014 soybean harvest may be around 30-33% done. Progress last week was 20% complete, up 10 points from the previous week, so 30% or more looks achievable. Export inspection numbers will also be delayed until tomorrow. Are the lows of the year now in? Trade talk suggests that many still expect further US yield increases from the USDA in coming WASDE reports, possibly reaching close to 50 bu/acre by the January report versus the 47.1 bu/acre that they gave us on Friday. That might suggest that we could go lower yet, especially given that record plantings and production are expected from Brazil and Argentina early in 2015. Brazilian plantings are stalled in the north/centre of the country though, waiting for rains. Chinese customs data shows that they imported just over 5 MMT of soybeans in September, down nearly 17% from a little over 6 MMT in August, although a decline at this time of year is normal. Nov 14 Soybeans closed at $9.45 1/4, up 22 3/4 cents; Jan 15 Soybeans closed at $9.53 1/4, up 22 3/4 cents; Oct 14 Soybean Meal closed at $343.40, up $4.10; Oct 14 Soybean Oil closed at 32.88, up 60 points.

Corn: The corn market also closed with good gains that managed to erase all of Friday's losses. Again harvest delays were the main reason, prompting some short-covering. "The morning radar shows strong showers in the central-southern Great Plains and Mid South. Showers would advance east bringing more unwanted rain to the Midwest. At least 1.25 inch of rain is predicted today and Tuesday in corn and soybeans, but 3-4 inches in the Mississippi Valley, Great Lakes and Eastern Midwest," said Martell Crop Projections. Trade expectations are for the US 2014 corn harvest to be around 25% complete when the USDA release their delayed crop progress report tomorrow. That would be only a modest advancement of 8 points from a week ago, which looks doable. Again the big question everyone is asking is are the lows in? According to a report on Agrimoney the general consensus is no. "Typically, the feeling goes, harvest has to be about 75+% through before a low is formed," they say. Only time will tell. Trade gossip suggests that many are looking for further US corn yield increases to come versus Friday's 174.2 bu/acre, with some suggesting close to 180 bu/acre being nearer to the truth at the end of the day. The USDA noted record ear numbers in corn this year, they didn't mention that these ears are also unusually long this year too - further increasing yield potential. The fact that the harvest is so delayed this year means that the USDA had less information available to them than normal when formulating their October yield estimates, or so the theory goes. Dec 14 Corn closed at $3.46, up 12 cents; Mar 15 Corn closed at $3.58 1/2, up 11 3/4 cents.

Wheat: The wheat market closed higher in sympathy with corn and beans, and is now back up above $5/bushel in Chicago. "Even when the wheat market traded firm and challenged the daily highs, I didn’t get the impression there was a big push to cover shorts. I expect the wheat market would have struggled to post higher trade at points during the session if corn and soybeans had not posted higher trade," said Benson Quinn's Brian Henry. Algeria were said to have bought around 600 TMT of wheat last week, although none of it is likely to be US origin. Egypt said that it now has enough wheat bought to last it until the first week of March. That doesn't count them out of keeping coming back in for further tenders between now and then though. They do appear to have a plan to reduce their dependency on wheat imports a little though, with the government saying that they intend to cut their international purchases to 4.0-4.5 MMT next year. Friday's surprisingly low US stocks numbers came courtesy of a rise in exports and an increased domestic feed usage of wheat. Traders are questioning the latter in particular, given the huge domestic corn crop that is on the way. What they now have at 654 million bushels could still end up at 700+ million it is thought. Winter grain plantings in Ukraine and Russia are well advance according to latest Ministry estimates. The Ukraine Ministry say that growers there have planted over 6 million ha (81% of plan), and in Russia 15.2 million (92%) has already been sown. Wheat will account for the vast majority of that in both countries. Dec 14 CBOT Wheat closed at $5.05 1/4, up 6 3/4 cents; Dec 14 KCBT Wheat closed at $5.84 1/4, up 6 1/2 cents; Dec 14 MGEX Wheat closed at $5.58 3/4, up 5 1/2 cents.