Nogger's Blog

24/03/15 -- Soycomplex: Beans closed a little lower. Trade focus is now firmly on next week's USDA planting intentions and quarterly stocks report from the USDA. Dr Cordonnier, in his first estimate for US plantings in 2015, estimated that American farmers would sow 85-86 million acres of soybean this spring/early summer. That would be a new record, and one that is up 1.3-2.3 million acres on last year, although it's lower than Informa's 87.5 million and Farm Futures Magazine's 87.3 million forecasts from last week. Recall that the USDA were only at 83.5 million in their February Outlook Forum, so it may be that the leap from that figure up closer to 87+ million is simply too big for them to take in one big jump at this early stage in the game. We will know next week. Very early corn planting in southern states is well behind normal for this time, which may mean ultimately more beans getting planted than originally intended. As far as quarterly stocks go, the average trade guess for those as of March 1 is 1.348 billion bushels, according to a Bloomberg survey. "There is talk of Brazilian truckers reorganising their coup. Short futures position holders may be giving it some respect. I doubt the cash trade in the US or Brazil has much interest this go around," said Benson Quinn. Their harvest is now well past halfway done, and yields aren't disappointing, whilst early Argentine yields have been impressive too, they add. South America's much talked about huge soybean crop looks like it is a reality. That makes prices continuing to nudge $10/bu look high, especially with US growers also looking set to "go large" with their plantings this year. May 15 Soybeans closed at $9.81 3/4, down 1 3/4 cents; Jul 15 Soybeans closed at $9.86 1/2, down 1 1/2 cents; May 15 Soybean Meal closed at $326.30, down $1.00; May 15 Soybean Oil closed at 31.11, down 4 points.

Corn: The corn market closed around 3 cents higher. "Today’s strength in corn seemed to be a function of the technicals in the corn market. Funds are estimated to be short corn at the moment and short covering was assumed the catalyst for corn’s most recent rally," said Benson Quinn. Dr Cordonnier pegged US 2015 corn plantings at 89 million acres, down 1.6 million on a year ago. That's not far away from Informa's 88.5 million acres and Farm Futures Magazine's 88.34 million acres from last week. Wet weather is delaying early corn planting in the south. Texas is only 14% complete versus 19% a year ago and 28% on average at this time. Louisianna is only 1% done versus 17% a year ago and 48% on average. They haven't even started in Arkansas which was 8% complete a year ago and is normally 11% done by now. Based on tonight's closes the Nov 15 soybean: Dec 15 corn ratio is down to 2.3:1 versus 2.4:1 at the beginning of last week, which may be favouring a bit more corn to get planted, weather permitting. US growers will be conscious though that corn is a more input hungry crop, and some may be looking to cut their costs a little in the 2015/16 crop year. Further north, the weather isn't yet showing any signs of aiding early fieldwork. "Nebraska, Iowa, Wisconsin and Minnesota are particularly dry, reporting soil moisture deficits of 1.5 -2.5 inches in the recent 45 days. With warming temperatures in spring, rainfall typically begins increasing. Very generous spring rainfall would be required to completely replenish dry fields. Corn planting is not due to begin until late April. Midwest temperatures have fluctuated wildly in recent weeks. February was very cold, among the lowest 10% on record. As a result, deep-penetrating frost developed on corn farms, without sufficient snow to insulate fields. Midwest cold is expected to continue in the upcoming with temperatures 5-10 F below average," say Martell Crop Projections. The average trade guess for March 1 US corn stocks is 7.609 billion bushels, according to a Bloomberg survey. May 15 Corn closed at $3.93 1/4, up 3 cents; Jul 15 Corn closed at $4.01 1/4, up 3 1/4 cents.

Wheat: The wheat market closed lower across all three exchanges in a correction from the recent rally. The fact that Kansas good to excellent wheat ratings were unchanged week on week, and that winter wheat in Colorado, Oklahoma and Texas showed an improvement was seen as a bearish surprise. The US crop isn't out of the woods yet though, with sub-zero temperatures on the cards over the next few days as the jet stream carves out a deep, cold trough over the eastern half of the United States, forecast Martell Crop Projections. Dryness also remains an issue. Oman were said to have bought one cargo of Russian wheat for July-August shipment. Algeria are tendering for 50,000 MT of optional origin wheat for July shipment. The USDA's FAS in South Africa estimated that the country would plant no more than 450,000 ha of wheat for the 2015/16 crop, a record low, as growers turn to other more profitable crops. They forecast imports next season rising to 1.9 MMT. Russia, Ukraine and Germany are the main wheat exporters to South Africa, so those three countries stand to benefit the most. South Africa imported 1.7 MMT of wheat in 2013/14, of which 810 TMT came from Russia (48%), 373 TMT from Ukraine (22%) and 179 TMT from Germany (11%). UkrAgroConsult estimated Ukraine’s 2015 wheat crop at 20.6 MMT, down 8.4% from 22.5 MMT in 2014. The USDA attaché in the Philippines estimated the country's 2014/15 wheat imports at 3.95 MMT, up 13% from a year previously. These will rise to around 4.0 MMT in 2015/16, they said. There's much debate over the health, or otherwise, of Russian and Ukraine winter grains as the crops emerge from dormancy. There's also lots of speculation regarding farmer access to credit, and their ability to successfully fund the spring planting campaign. Russian seed prices are said to be 40-60% higher than they were 12 months ago, with agrochemical prices up 40-50% and fertiliser levels running around 45% higher. Russian short-term loan interest rates are at least 22% versus 12% a year ago. May 15 CBOT Wheat closed at $5.23 1/2, down 10 1/2 cents; May 15 KCBT Wheat closed at $5.65 1/4, down 9 1/4 cents; May 15 MGEX Wheat closed at $5.81 3/4, down 8 1/4 cents.