Nogger's Blog

11/02/15 -- Soycomplex: Beans closed higher, more or less reversing last night's losses. It's hard to find a reason why the market had this sudden change of heart today, as nothing much has changed. The dollar remains strong, crude was back below $50/barrel and the Argentine soybean crop appears to be getting larger by the day. The Rosario Grain Exchange today pegged that at a record 58 MMT versus a previous estimate of 54.5 MMT. The USDA were "only" at 56 MMT just yesterday. Lanworth went even higher, coming out with a figure of 59.7 MMT for Argentina. They did trim their forecast for Brazil, down from 96.5 MMT to 94.5 MMT, now matching the USDA, although that's still a record crop. Conab are due to release their Brazilian estimates tomorrow. They had the Brazilian crop at 95.9 MMT last time. Chinese buying interest has cooled, as it usually does at this time of year, ahead of their Lunar New Year celebrations that start next week. Chinese markets will be closed February 19-25. Brazil and Argentina are on holiday Monday and Tuesday. Tomorrow's weekly export sales report from the USDA will make interesting reading. The trade has been expecting US sales to, if not exactly fall off a cliff, then slow down pretty dramatically in recent weeks, and this hasn't really happened yet. Last week's sales of 489,700 MT for 2014/15 were down 35 percent from the previous week, but still at the top end of trade estimates. This week the market is looking for something around 250-450 TMT, according to Benson Quinn. Mar 15 Soybeans closed at $9.77 3/4, up 8 3/4 cents; May 15 Soybeans closed at $9.80 3/4, up 6 1/2 cents; Mar 15 Soybean Meal closed at $329.60, up $2.70; Mar 15 Soybean Oil closed at 31.75, up 30 points.

Corn: The corn market closed around 2-3 cents lower. Ukraine said that it had exported 9.7 MMT of corn so far this season, meaning that it's just past halfway through matching the USDA's new estimate for the season of 18 MMT. "Pending any major increases to hostilities, the Ukraine will remain the global price setter for corn for the foreseeable future," said Benson Quinn. South Korea's NOFI bought 128,000 MT of optional origin corn for August–September shipment. Lanworth increased their forecast for this year's Argentine corn crop to a hefty looking 28.8 MMT versus a previous estimate of 28.5 MMT and the USDA's estimate of only 23 MMT from yesterday. "Recent rains have reversed the dryness in the south, including central Buenos Aires, La Pampa, and western Cordoba and in the northern and western fringes of the agricultural regions. Only about half the corn crop was seeded by the first week of December and crop stage varies across the country. The crop condition is reported as excellent around the delegation of Marco Juárez within the province of Cordoba, where some corn was planted later and is just now entering the late vegetative stage into pollination. In the drier region of Entre Rios, early planted corn is ready for harvest," the USDA said. The Rosario Grains Exchange estimated Argentina’s corn crop at 23.5 MMT versus 22.4 MMT previously. Lanworth now have the Brazilian corn crop estimated at 75.5 MMT versus a previous figure of 75.7 MMT. Conab are due out tomorrow, last time they had the Brazilian corn crop estimated at 79.1 MMT. The US Energy Dept reported weekly ethanol production up 13,000 barrels/day to 961,000 bpd. The USDA said in it's baseline projections that it sees US corn for ethanol usage relatively flat across the next 10 years, using around 35% of the US corn crop annually. Weekly export sales tomorrow are expected at around 600-850 TMT. Mar 15 Corn closed at $3.85 3/4, down 2 1/4 cent; May 15 Corn closed at $3.93 3/4, down 2 1/2 cents.

Wheat: The wheat market closed around 4-6 cents higher across the three exchanges. As with soybeans, there didn't really seem to be any particular reason for the change in sentiment. Last night's USDA report didn't offer a lot of encouragement for US wheat in particular, with US exports lowered and ending stocks increased. World production was also raised to a new record high and global ending stocks pegged at a very ample near 198 MMT. Egypt are said to have sent a trade delegation to Russia to appeal for them to drop their new export duty on wheat. "It isn’t clear whether this would be in place of a rumoured purchase of US wheat, but it does appear the restrictions have left the world’s largest importer in need of wheat," said Benson Quinn. China sold 34% of the total 805,872 MT of domestic wheat offered up at auction from it's reserves today. They also sold 21% of the volume of imported wheat offered from reserves. South Korea's NOFI bought 55,000 MT of optional origin feed wheat for June shipment. Jordan bought 100,000 MT of optional origin wheat and cancelled a tender for 100,000 MT of optional origin barley. South Korea's MFG bought 45,000 MT of optional origin wheat for June shipment. Kazakhstan's Stats Agency said that the country's 2014 grain crop was 17.2 MMT, including 13.0 MMT of wheat, down 6% on last year. Ukraine said that it had exported nearly 9 MMT of wheat so far this season. You will recall that the Ukraine Ag Ministry recently said it had agreed to cap exports at 12.8 MMT this season. Martell Crop Projections say that recent precipitation in Russian winter wheat areas may have boosted the what was a rather grim outlook for the crop. "Heavy precipitation affected a wide swath of the winter grain belt, eastern Ukraine, Russia’s Southern District, the Black Earth and Volga Valley. All are important winter grain areas. By mid January, a thick layer of snow accumulated, protecting wheat from gusty winds and very cold temperatures. Precipitation has continued generous up through early February except for drying in Stavropol in the Southern District. The turnaround in Russia wheat prospects seemed unimaginable last fall in the midst of severe drought," they said. Mar 15 CBOT Wheat closed at $5.25 3/4, up 4 cents; Mar 15 KCBT Wheat closed at $5.59 1/4, up 5 1/4 cents; Mar 15 MGEX Wheat closed at $5.76, up 6 cents.