Nogger's Blog

06/02/15 -- Soycomplex: Beans closed lower on the day, but higher for the week. The market seems to be trying to balance the impending record large South American soybean crop, with the hitherto record large demand that's been seen so far this season for US soybeans. The Brazilian crop is big, but maybe not as large as some were/are expecting. The Argentine crop seems to be getting larger though. The prospect for record large US soybean planting this spring is hardly bullish either, although the market has been talking these same stories now for the last 2 or 3 years. The very strong US dollar, and the outlook for that to remain so throughout 2015, is a negative. We also have the new element of weakness in crude oil values. Although WTI crude closed higher tonight and is now more than 16% up off the recent lows, it is still more than 50% lower than the highs of last summer. Soyoil posted decent gains, up 6%, this week on the back of resurgent palm oil prices. That has meal on the back foot for a change, making it the weakest leg of the three this week. Mar 15 Soybeans closed at $9.73 1/2, down 7 3/4 cents; May 15 Soybeans closed at $9.80, down 7 3/4 cents; Mar 15 Soybean Meal closed at $329.40, down $2.00; Mar 15 Soybean Oil closed at 31.82, up 11 points. For the week Mar 15 beans were up 12 1/2 cents, with meal down 50 cents and oil up 182 points.

Corn: The corn market closed with fractional gains on the day, but with decent advances for the week. Crude oil was firmer, which helped. US gasoline prices are now said to be at a small premium to ethanol levels, which won't do any harm either. The weak oil price is helping freight rates, with the Baltic Dry Index now within a few points of being at its lowest level since 1986. This is said to be helping demand for US corn. China still seems to prefer US sorghum however. CNGOIC said China bought more than 900,000 MT of US sorghum in January and estimated China’s 2014/15 sorghum imports at a record 6.2 MMT. Societe Generale forecast US 2015 corn plantings at a surprisingly high 90 million acres, down only 600,000 acres on last year. The USDA will release some initial planting projections at their Outlook Forum later this month, before the more "official" prospective plantings report comes out at the end of March. Next week's WASDE report, due Tuesday, isn't expected to throw up any major surprises for the corn market. Conab are due out next Thursday with their latest Brazilian crop production estimates. They had the Brazilian corn crop at a high looking 79.1 MMT last time versus the USDA's figure of 75 MMT. Mar 15 Corn closed at $3.85 3/4, up 1/2 cent; May 15 Corn closed at $3.94, up 3/4 cent. For the week, Mar 15 corn ended with gains of 15 3/4 cents, or more than 4%.

Wheat: The wheat market closed mixed, a little higher in Chicago, and a bit lower in Kansas and Minneapolis. An early attempt at a rally ran out of steam, possibly due to the firmer US dollar. All three markets still managed to end the week with gains of more than 20 cents however. There's some talk of US winter wheat being a bit vulnerable in places.  "Temperatures are set warm up in the Central Great Plains, increasing concerns about already dry wheat fields. Mean temperatures are expected to exceed 41 F in the upcoming week, the threshold for wheat growth and development. This would be the 4th successive week of warming temperatures in hard red winter wheat areas. Wheat could lose its winter hardiness and begin breaking dormancy. This increases the risk for a potentially damaging freeze later on, when wheat development is more advanced," said Martell Crop Projections. "Declining topsoil moisture in Kansas is also worrisome, where the uppermost inch of the soil is very dry," they added. IKAR estimated Russia's 2014/15 grain exports at 28.7 MMT, and forecast those for next season at a wide ranging 20-30 MMT. The market still seems generally relaxed about widespread talk of winter crop damage and a lack of cash to fund spring plantings and fertiliser purchases in Russia. More relaxed than it should be I'd say. Mar 15 CBOT Wheat closed at $5.27, up 1 1/4 cents; Mar 15 KCBT Wheat closed at $5.61 3/4, down 2 1/4 cents; Mar 15 MGEX Wheat closed at $5.77, down 2 cents. For the week, Chicago wheat put on 24 1/4 cents, with Kansas adding 21 1/2 cents and Minneapolis gaining 20 1/4 cents.