Nogger's Blog

13/02/15 -- Soycomplex: Beans closed higher on the day and higher for the week. Yesterday's better than expected weekly export sales total appears to confirm that demand for US beans hasn't switched entirely to South America just yet. In addition, the USDA today reported 110,000 MT of US beans sold to China for 2015/16 shipment. There's talk of a truckers strike in Santos, Brazil. Also in Brazil, Parana’s soybean harvest is said to be 17% complete versus 12% a week ago. The Buenos Aires Grains Exchange estimated Argentina's soybean crop at a record 57 MMT, unchanged from a week ago. US markets will be closed Monday for the Presidents Day holiday. Brazil and Argentina are closed Monday and Tuesday for a Carnival. The NOPA January crush report comes out on Tuesday. Chinese New Year begins on Thursday when their markets will be closed for a week so activity from that quarter will be limited. The USDA's annual Outlook Conference takes place Thursday and Friday next week. They will give us some initial thoughts on US corn and soybean plantings this spring. The weather pattern has fundamentally changed in Brazil, said Martell Crop Projections. "Much cooler temperatures are predicted in Mato Grosso and the tropics at large. The new rainfall forecast is significantly wetter than previously, also. Parana and Mato Grosso do Sul would receive heavy drenching rain due to a stalled trough of low pressure. Southern Mato Grosso is also expecting soaking rains, the leading soybean state. Heavy February rainfall may be too late to rescue tropical soybeans from a reduced yield. The key pod filling period is already finished, occurring in January. Very serious drought developed last month. This would have reduced the size and weight of developing soybeans inside pods," they said. Mar 15 Soybeans closed at $9.90 1/2, up 6 3/4 cents; May 15 Soybeans closed at $9.94 3/4, up 8 cents; Mar 15 Soybean Meal closed at $332.30, up $1.80; Mar 15 Soybean Oil closed at 32.40, up 39 points. For the week front month beans were up 21 1/4 cents, with meal up $2.90 and oil gaining 58 points.

Corn: The corn market closed higher on the day and with small gains for the week. There may have been an element of book-squaring ahead of the three-day weekend. Taiwan were said to have bought 60,000 MT of US corn for April shipment. In Brazil, DERAL said that the state of Parana’s full season corn harvest is 11% complete versus 8% a week ago. They estimated safrinha corn planting in the state at 31% complete versus 25% a week ago. The Buenos Aires Grains Exchange estimated Argentina's corn area at 3.14 million hectares versus a previous estimate of 3.0 million. They see production at 22.5 MMT in their first estimate of the season. That's in line with other estimates in the ring. China appears to be continuing with its policy of buying large volumes of sorghum and barley in preference to corn. The USDA's long-term baseline projections this week said that China will import 6.5 MMT of corn in 2023/24. A year ago that estimate was 22 MMT. Ukraine seaports shipped 2.3 MMT of grains in January, a 15.7% decline on a year previously, said the Ukraine Seaports Authority. Most of that will have been corn. Ukraine still has around half of it's projected 2014/15 corn exports to market. The US dollar was lower for once, following the agreed ceasefire in Ukraine and following weaker than expected US economic data yesterday. Crude oil was also higher, adding a bit of extra support for corn. Lack of farmer enthusiasm to sell corn at below $4/bushel may also have provided some support today. A survey by Farm Journal Pulse magazine suggested that 21% of US farmers have zero corn forward priced at this point, and a further 38% have priced a quarter of less of their 2014 corm harvest. Only 18% have all their corn sold, the survey found. Mar 15 Corn closed at $3.87 1/4, up 4 1/4 cents; May 15 Corn closed at $3.95 1/4, up 4 1/4 cents. For the week, Mar 15 corn was up 1 1/2 cents and May 15 was 1 1/4 cents higher.

Wheat: The wheat market closed with good gains for the day, and small gains for the week. A harsh weekend Arctic blast hitting the Midwest maybe encouraged some shorts to get out today, ahead of a 3-day weekend. Ukraine said that 82% of their winter grains are in good to satisfactory condition, and 18% weak/thinned, unchanged from a week ago. Fierce fighting in eastern Ukraine is apparently ongoing, just ahead of the supposedly agreed ceasefire. Local confidence that this one will hold where others have failed doesn't seem to be too high. APK Inform increased their forecast for Russian barley exports this season by 25% from their previous estimate to 5 MMT. That's sharply higher than the 2.7 MMT exported last season and 39% above the previous annual record total of 3.6 MMT shipped out in 2011/12. The EU is also seen exporting a record volume of barley this season, and possibly will beat last season's all time high wheat shipments too. The weak euro and low world freight rates is enabling European grains to make inroads into Asia and other non-traditional destinations which have been largely closed to them in previous years. The Philippines, Thailand, and South Korea are reported by Reuters to be seeking French feed wheat cargoes. Bangladesh is tendering for wheat too, having bought a large consignment of French material earlier in the month for the first time since 2000/01. China are due to auction 970,600 MT of wheat from state-owned reserves next week. Recent sales haven't been massively well subscribed to. They only sold 34% of the total 805,872 MT of domestic wheat offered up at auction from it's reserves last week. Iraq's wheat tender offers are due this weekend. Morocco are tendering for 360,000 MT of EU soft wheat and small volume of durum. Mar 15 CBOT Wheat closed at $5.33, up 11 3/4 cents; Mar 15 KCBT Wheat closed at $5.62 3/4, up 8 3/4 cents; Mar 15 MGEX Wheat closed at $5.87, up 12 3/4 cents. For the week, Chicago wheat finished with gains of 6 cents, with Kansas a cent higher and Minneapolis up 10 cents.