Nogger's Blog

05/01/15 -- Soycomplex: Beans, meal and oil all closed sharply higher on what looks like short-covering/the establishment of fresh longs. There wasn't anything outrageously bullish to warrant a near 40 cents higher move, maybe it was simply new month, new year, new money? Weekly export inspections of 1.4 MMT were good, and far more than needed to meet USDA projections for the season. South American weather doesn't seem overly concerning, a bit too wet in parts of southern Brazil, and a bit dry in some central/northern areas, and also in parts of Argentina, but nothing to get too excited about just yet. Traders still see record Brazilian production this year, and if not record output, then certainly close to, from Argentina. Chinese demand also remains high however. The USDA also reported 233,000 MT of US beans sold to China for 2014/15 shipment under the daily reporting system. The Argentine grower is said to have over 25% of his 2013/14 soybean crop still to sell. The National Bank of Argentina are said to be carrying out their threat to close the accounts of, and refuse to extend credit to, those still carrying old crop beans. For new crop they are said to be around 5% sold, which is similar to a year ago. Flooding in Malaysia remains a threat to palm oil production there. Fund money was said to have ended up as a net buyer of 15,000 soybean contracts on the day. Jan 15 Soybeans closed at $10.39 3/4, up 37 1/4 cents; Mar 15 Soybeans closed at $10.45 1/4, up 37 3/4 cents; Jan 15 Soybean Meal closed at $369.00, up $12.50; Jan 15 Soybean Oil closed at 32.70, up 75 points.

Corn: The corn market closed around 10 cents higher. As with soybeans, it seems that fund money came out of the blocks in buying mode on what could be called the first "proper" full day of trading of 2015. They were given credit for ending up as net buyers of around 10-12,000 lots on the day. Again, there wasn't any single element that really seemed to justify today's action. Weekly export inspections were 538,945 MT, which is not a huge number, even for a holiday shortened week. They need to be around 900,000 MT to reach the USDA's target for the season. Year to date inspections are up only 1% on a year ago. The market largely ignored the US dollar trading to new highs, and crude slumping to fresh lows. "Technicals hinted at improving with today’s higher trade. However, it feels like the market is going to need to force more short covering to sustain a rally from the current levels. The current technical structure of the market does not support that idea," said Benson Quinn Commodities. The Argentine Ministry reported growers there to be almost 93% sold on old crop corn (versus 84% a year ago), and already 20% committed on new crop (compared to less than 7% sold a year ago). China are said to be in the market for US DDGS for Feb–Mar shipment. The Chinese government is due to attempt to auction up to 5 MMT of corn stocks this week. Traders don't expect the auction to be particularly well subscribed. Mar 15 Corn closed at $4.06, up 10 1/4 cents; May 15 Corn closed at $4.14 3/4, up 10 1/4 cents.

Wheat: The wheat market closed with fair gains, but looked more like a follower than a leader today. Prices ended will off the intra-day highs. There's talk of potential winterkill to US wheat in some parts of the Plains, but damage is not as yet expected to be particularly significant or widespread. The winterkill talk also extends to the Black Sea region, which is also seeing very cold temperatures with some areas lacking snow coverage, noted Benson Quinn. As with corn and beans today simply looks like fund money looking to start the new year on the offensive, establishing new longs, for all the recent talk of "rebalancing" meaning them starting 2015 as a wheat seller. There's some debate as to whether agri-commodities are currently perceived as being a better investment bet than equities, which may be encouraging some new money into the market. Weekly US export inspections of 352,829 MT were less than thrilling. The dollar hitting new 9-year highs against the euro won't help US wheat compete with offers out of Europe. The Argentine Ag Ministry reported growers there have still only sold 81% of their old crop wheat, and have nearly 40% of their new crop committed. Russian seaports were said to have shipped out 19 MMT of wheat in 2014, more than double the volume exported in 2013. Russian wheat is offered in the market for January shipment, but anything after that is uncompetitive once the new export duty kicks in. Ukraine seaports shipped out 9.4 MMT of wheat in 2014, up 42% on a year previously. Mar 15 CBOT Wheat closed at $5.89, up 7 3/4 cents; Mar 15 KCBT Wheat closed at $6.24 3/4, up 7 3/4 cents; Mar 15 MGEX Wheat closed at $6.21 1/2, up 10 1/2 cents.