Nogger's Blog

20/03/15 -- Soycomplex: Beans closed with decent double digit gains, helped by the sharply weaker US dollar. Short-covering looks like it may have been a feature today, with the latest Commitment of Traders report showing managed money having added more than 22k lots to their short for the week through to Tuesday night. That took their overall short position to almost 40k contracts. Informa Economics trimmed their estimate for US soybean plantings this year by a little over 0.5 million acres. The number offered today was 87.5 million, which is very close to Farm Futures Magazine's 87.3 million estimate from earlier in the week. It would also be a record area, and up 3.8 million on last year. In percentage terms, corn rose more than beans today (up more than 3% in corn versus a rise of "only" 1.2% for beans). Based on tonight's market closes, the new crop soybean:corn price ratio is down below 2.34:1 versus 2.4:1 at the beginning of the week. The Buenos Aires Grain Exchange said that the very early soybean harvest in Argentina is now underway, and that first yields are above average. They were unchanged on their production estimate at 57 MMT. Others are as high as 60 MMT. Either would be a record. Brazil's harvest is now said to be around 60% complete. Dr Cordonnier says that the number of vessels scheduled to arrive in Brazil by the end of April to load soybeans is 141, up from 123 a week ago and versus 122 this time last year. The total volume set to load by the end of April is 8.5 MMT, he adds. Very favourable soybean yields have been reported in Southern Brazil, which has been wet throughout the growing season. "Parana producers reported 50 bushels per acre as the harvest has advanced. This would be 15% higher than the soybean yield last year, which was damaged by a severe midsummer drought. Rio Grande do Sul soybean yields were exceptionally favourable with 43.5 bushels per acre, setting a new record," said Martell Crop Projections. May 15 Soybeans closed at $9.73 3/4, up 12 cents; Jul 15 Soybeans closed at $9.78, up 11 1/4 cents; May 15 Soybean Meal closed at $324.00, up $4.70; May 15 Soybean Oil closed at 30.68, up 6 points. For the week that puts front month beans up 5 1/2 cents, with meal down $14 and oil up 49 points as meal becomes the weakest leg of the complex.

Corn: The corn market also closed with double digit gains. The US dollar, which dumped on Wednesday following the Fed announcement that indicated an interest rate rise wasn't on the cards this year, appeared to have found its feet again yesterday. All that changed again today however, with the US currency back under pressure, which was supportive for the entire US grains complex. As with soybeans, Informa lowered their 2015 US corn planting estimate slightly from their previous forecast, and at 88.5 million acres they are again very close to the figure offered up by Farm Futures Magazine earlier in the week (88.34 million acres). Plantings were 90.6 million acres in 2014, so Informa's number is a fairly modest 2.3% decline versus a year ago. Informa pegged US 2015 sorghum plantings at 8.2 million acres, up 600,000 from their previous forecast and more than 1 million (or 15%) up on last year. Short-covering was most like also a feature in the US corn market today, with the latest Commitment of Traders report showing that managed money added nearly 70k contracts to their shorts in the week through to Tuesday night, flipping them from a net long to a net short of 37k contracts. Fund buying was estimated at around a net 12,000 contracts today. The Buenos Aires Grain Exchange said that the Argentine corn harvest had advanced to 5.6% done, up from 3.4% a week ago and better than 2.2% complete this time last year. They held steady with their production estimate at 22.5 MMT, a 16.5% fall versus a year ago. South Africa are said to be importing corn for the first time in almost a year after the worst drought since 1992 slashed corn production by around a third. Output this year will be no greater than 9.66 MMT say CEC. Three shipments of 30,000 MT each of yellow corn from Argentina are currently said to be en route to Cape Town destined for animal feed. The local price of white corn, a human food staple, has meanwhile already risen 27 percent in Johannesburg this year, said one analyst. May 15 Corn closed at $3.85, up 11 1/2 cents; Jul 15 Corn closed at $3.92 3/4, up 11 1/4 cents. For the week May 15 corn was up 11 cents.

Wheat: The wheat market closed with strong gains on the day, and for the week, across all three exchanges. Talk of significant winterkill damage to US winter wheat in Western Nebraska, Central Kansas, Eastern Colorado and North Oklahoma is rife. That seems to be enough to encourage fund money to exit some of their sizeable short positions in wheat, even if rising prices will hardly foster additional export interest for US wheat. This damage was probably caused by a sudden dip well below freezing around Nov 12, it is thought. Dryness on the Southern Plains also remains an issue, and what recent rain has fallen has been generally light (1/4 inches) and scattered. Today's weaker US dollar was another a supportive feature, helping May 15 Chicago wheat to close above its 50-day moving average for the first time since Jan 7. Wheat futures in Paris closed at their best levels in nearly two months tonight, adding a bit more support. Informa estimated US all wheat plantings at 56 million acres for the 2015 harvest. This was 1 million more than they estimated in January. Plantings for 2014 were 56.82 million, so this would still be a decline of 1.4% year-on-year. Ukraine said that they'd exported 26.13 MMT of grains so far this season, including 9.55 MMT of wheat, more than 4 MMT of barley and 12.31 MMT of corn. Early spring grain planting in Ukraine (mostly barley) is now said to be 16% complete. The Chinese government sold less than 10% of the US HRW wheat offered up at auction today. They are proposing to sell off Australian origin wheat held in state reserves next week. China will start harvesting it's 2015 winter wheat crop next month. Current crop conditions appear favourable in Henan, the leading province which produces around 23% of the nation's crop, but rather poor in the second largest region of Shandong (where 19% of China's wheat crop is grown) and also in the fourth highest producing province of Hebei (which accounts for 10% of nation production), say Martell Crop Projections. May 15 CBOT Wheat closed at $5.30, up 18 cents; May 15 KCBT Wheat closed at $5.69 1/2, up 19 1/4 cents; May 15 MGEX Wheat closed at $5.88 3/4, up 16 cents. For the week overall that puts Chicago wheat 21 1/4 cents higher, with Kansas wheat adding 27 3/4 cents and Minneapolis gaining 34 1/4 cents.