Nogger's Blog

31/12/14 -- Soycomplex: Beans closed with losses of around 18-20 cents to end the year. Volume and fresh news was lacking, as you might expect. Beans close 2014 almost $3, or more than 22%, lower than they began it. Meal has lost $73, or nearly 17%, of it's value in this time. Soybean oil is down the best part of 700 points, or nearly 18%. On the day "soybeans tumbled for third straight session as weaker cash markets, slowing export demand and mostly favourable South American weather forecast have funds adding to short positions," said Benson Quinn. Demand is showing signs of starting to switch to South America. Weather developments there may be the main driver over the next few months, whilst they've already started harvesting some very early beans in Brazil's Mato Grosso, they're only around 75% planted in Argentina. With bumper production prospects for 2015, the market will be nervous of any signs of a possible slowdown in demand from China, who the world is relying on to account for almost two thirds of global trade in soybeans in 2014/15. Note that soybeans traditionally put in an early calendar year low in late January or early February - the February break or "John Deere Low". This was set on Jan 29 in 2014, Jan 13 in 2012 and Feb 3 in 2010 (but didn't really happen in 2011). Jan 15 Soybeans closed at $10.19 1/4, down 18 1/2 cents; Mar 15 Soybeans closed at $10.23 1/2, down 20 1/2 cents; Jan 15 Soybean Meal closed at $364.60, down $4.90; Jan 15 Soybean Oil closed at 31.97, down 92 points.

Corn: The corn market closed the best part of 10 cents lower. For the year corn is down 73 cents, or nearly 17% versus Dec 31, 2013. "Corn seemed to be the loss leader today as market tumbled through its 20-day moving average and fell below $4 in the front month March contract for first time since December 12," said Benson Quinn. Dollar strength continues to dog export hopes/ambitions. China finally approving MIR 162 corn for import should be a supportive factor, although they seem to be buying more sorghum than corn at the moment. Weekly US ethanol production data from the Energy Dept shows output down 20,000 barrels/day compared to last week's record to 972,000 bpd. Crude oil prices continue to fall, with NYMEX WTI crude down 46% compared to last New Year's Eve, and ending the year more than 50% off the summer highs. Corn is doing it's best to ignore that bearish influence, helped by the ethanol mandate. Heavy rains in central and southern Brazil, along with many parts of Argentina should be friendly for corn production there in 2014/15. The seasonal chart for corn shows a general gradual appreciation in price through most of the first half of the year, with a peak in June (although this happened on Apr 29 in 2014), followed by a slump into the harvest lows. These are frequently set in early October (Sep 30 in 2014). Mar 15 Corn closed at $3.97, down 9 1/2 cents; May 15 Corn closed at $4.05 3/4, down 9 1/4 cents.

Wheat: "The wheat market closed lower as Russian wheat export tariff becomes an old story as the world still remains well supplied with wheat," said Benson Quinn. Still, out of the three main agri-commodities, wheat has fared the best price-wise in 2014. Chicago wheat ends the year only 15 1/2 cents lower than it began it, for a net 2.6% loss versus Dec 31, 2013. Kansas wheat is down 2.2% and Minneapolis down 2% year-on-year. Rusagrotrans estimated Russia's Jan 2015 grain exports at 1.5 MMT, a drop of around 45% compared to December. That total would however still be a bit higher than the 1.14 MMT exported in Jan 2014, and the 1.34 MMT shipped out in Jan 2013. Exports should drop off sharply in February when the new export tax kicks in. MDA CropCast cut their forecast for the US 2015/16 all wheat crop by 0.8 MMT from last week. "Some spotty winterkill has occurred in south central Nebraska, north central Kansas, and southeastern Colorado," due to cold, they said. Losses are not widespread though, they added. Market influences for 2015 will come from Russia's export curbs, and how crops there and in Ukraine come though winter. Also farmers' ability to fund spring plantings and purchase inputs due to the sharp falls seen in their respective currencies will be another factor to keep an eye on. The seasonal study shows the early highs of the year in Chicago wheat frequently set in Mar and May, just as they were in 2014. Mar 15 CBOT Wheat closed at $5.89 3/4, down 12 1/4 cents; Mar 15 KCBT Wheat closed at $6.26 1/2, down 9 1/2 cents; Mar 15 MGEX Wheat closed at $6.22, down 5 1/4 cents.