Nogger's Blog

10/03/15 -- Soycomplex: Beans closed lower, after the release of the March USDA WASDE report. That left global production in 2014/15 completely unchanged, contrary to trade expectations for a reduction in output in Brazil and a rise in Argentina. Chinese imports were also unchanged at 74 MMT, as were US, Brazilian and Argentine exports. The world crush was lowered a little to 254.2 MMT, courtesy of India, with global ending stocks raised a fraction to 89.5 MMT - up 35% on a year ago. US 2014/15 soybean ending stocks were unchanged on last month at 385 million bushels (10.48 MMT), with the trade expecting a reduction to around 377 million bushels. Interestingly, US analyst Alan Brugler reports that final US soybean demand has been larger than the March WASDE estimate every year since 1990 except for 2010/11. Elsewhere, CONAB cut their estimate for Brazil's 2014/15 soybean crop from the 94.6 MMT forecast previously to 93.3 MMT, which is now 1.2 MMT lower than today's unchanged USDA forecast. Mar 15 Soybeans closed at $9.80, down 8 1/4 cents; May 15 Soybeans closed at $9.84 1/2, down 8 3/4 cents; Mar 15 Soybean Meal closed at $342.00, down $1.90; Mar 15 Soybean Oil closed at 30.84, down 4 points.

Corn: The corn market ended a tad lower, failing to hold onto early modest gains. These were tied to the fact that the USDA lowered US 2014/15 corn ending stocks more than anticipated. They cut this year’s ending stocks to 1.777 billion bushels versus 1.827 billion previously and the 1.822 billion average trade guess. US 2014/15 exports were raised 1.0 MMT to 45.5 MMT "on recent strong sales and shipments and a longer-than-expected window of competitiveness compared with Brazil and Argentina". Argentine exports were also raised 1 MMT to 14.5 MMT, with Brazil's seen unchanged at 22 MMT. Argentine output was increased by 500,000 MT to 23.5 MMT, which was in line with trade forecasts. Brazil's crop was unchanged at 75 MMT. Production in South Africa was lowered 2 MMT, as expected, to 11.5 MMT. There was no change for Chinese imports, which were left at 2.5 MMT. There were no changes to corn ending stocks among the leading exporting nations, but "others" were cut by more than 4 MMT, taking global carryout down from the 189.6 MMT forecast a month ago to 185.3 MMT. In other news, the USDA announced a 107,255 MT export sale of sorghum to China for 2015/16 delivery as they continue to import large quantities of other alternative coarse grains. Chinese barley imports were also increased by 1.5 MMT to 6 MMT. Mar 15 Corn closed at $3.82 1/4, down 1 cent; May 15 Corn closed at $3.88, down 3/4 cent.

Wheat: The wheat market closed higher as the USDA trimmed back 2014/15 US all wheat ending stocks a tad from 692 million bushels to 691 million. The trade was expecting an increase to around 703 million. US 2014/15 exports were seen unchanged at 25 MMT. Some were expecting a reduction there given the strength of the US dollar and recent largely disappointing export sales. On a global level, world ending stocks were little changed at 197.7 MMT, as was consumption at 714.5 MMT. World exports too were virtually unchanged at just over 160 MMT, with the EU grabbing a larger share of the cake (up 500,000 MT to 31.5 MMT) and Argentina a smaller slice (down 500,000 MT to 5.5 MMT). In other news, in Brazil the Parana wheat area for new crop is seen virtually unchanged, despite local prices having fallen 26% year-on-year. This is due to the fact that soybeans in the state were planted late, meaning that the optimum time for planting safrinha corn is already passed. This leaves the state's growers with a stark choice between planting wheat of nothing. Winter wheat planting usually takes place April/May, and production later this year is currently estimated 8% higher than last year's frost damaged crop at 4.1 MMT - which is about two thirds of national production. The Indonesia Flour Millers Association estimated the nation's wheat imports up 5.5% at a record 7.8 MMT versus the USDA's 7.7 MMT estimate. Mar 15 CBOT Wheat closed at $4.96 1/2, up 2 1/4 cents; Mar 15 KCBT Wheat closed at $5.34 3/4, up 5 3/4 cents; Mar 15 MGEX Wheat closed at $5.51 3/4, up 3 1/2 cents.