Nogger's Blog

17/02/15 -- Soycomplex: Beans and meal trade higher, but off the highs. Mar 15 beans hit $9.99 3/4 but couldn't quite breach the $10 mark by around 17.00 GMT. The trade is expecting the USDA to suggest 2015 US soybean plantings to increase somewhere between 2-4 million acres this year to all time highs in their Outlook Forum at the end of the week. Safras said that Brazilian farmers are only 38% sold on their anticipated record soybean crop this year. That's down from 58% sold a year ago and 54% on average at this time. It's also only up 6 points from a week ago. Soybean farmers in Brazil's largest producing Mato Grosso state are 55% sold versus 69% on average. The harvest there is now 25% complete, they said. In the second top producer, Parana, farmers are 23% sold versus 41% normally and the harvest is 17% complete. Dr Cordonnier estimated the Brazilian soybean crop at 93 MMT, a record, although unchanged from a week ago. Some had suggested earlier in the season that production could come close to hitting the magic 100 MMT mark, but dry weather in January put paid to that. Dr Cordonnnier upped his forecast for Argentina by 1 MMT to a new record 57 MMT.

Corn: The corn market slipped back from higher overnight trade to modestly lower once the daytime session began. A weaker look to wheat, which had posted double digit gains at one stage overnight, may have been a contributory factor. The trade is expecting the USDA to indicate that US growers may plant 3-4 million fewer corn acres in 2015 at this week's Outlook Conference. It's early days yet to be talking of an emerging weather problem for US corn in 2015. Martell Crop Projections however say that "strong drying in the US heartland has increased moisture stress in hard red winter wheat also causing concerns for spring corn planting in the Midwest." Dr Cordonnier raised his forecast for this year's Argentine corn crop by 1 MMT to 23 MMT. He was unchanged on his outlook for Brazil at 74 MMT. Brazil's safrinha corn crop is said to be only 23% planted versus around 50% normally. UkrAgroConsult said that they expect Ukraine farmers to reduce corn plantings this year by 5-7% due to increased costs. Rosstat said that Russia's Feb 1 corn stocks were up 13.3% on a year ago. The Russian Deputy PM said that the country will subsidise the Russian sector to the tune of RUB35.7 billion, some of which will go to help farmers get cheap (ish) loans to help with spring plantings.

Wheat: The wheat market gave up most of it's early gains, which ran into double digits at one stage overnight, once the daytime session opened. Early strength was probably tied to news that the fighting in eastern Ukraine goes on, despite last week's "ceasefire" and also concerns of possible damage to US winter wheat due to bitter cold across large parts of the country. "The jet stream has begun to carve out a deep, cold trough over the Midwest and eastern United States. Arctic air began spilling into the heartland this morning. February temperatures have been persistently cold averaging 15-20 F in the Upper Midwest, 20-30 F in the southern half of the corn belt. The new Midwest forecast is very cold calling for temperatures more than 15 F below average," said Martell Crop Projections. SovEcon said that Russia may still export 21 MMT of wheat this season, despite the new export duty. That probably gives them around 2 MMT to export in the Feb/Jun period. Russian grain stocks were up 15.4% as of Feb 1, with wheat stocks 22.7% higher, according to Rosstat. Argentina approved a further 1 MMT of wheat for export in 2014/15. Japan tendered for 101,128 MT of a combination of US and Australian wheat for Mar/Apr shipment. Algeria are tendering for 50 TMT of optional origin milling wheat for June shipment.