Nogger's Blog

06/03/15 -- Soycomplex: Beans closed little changed on the day, but sharply lower for the week. The truckers strike in Brazil appears to be over - for now - although the protesters said that they might resume their action on Mar 10 if talks with the government fail to reach an agreement. Demand is switching to South America, and for the time being Brazil specifically. There's nothing particularly new about that, and with the US exporter already 98% sold on beans, what else is demand supposed to do? We probably haven't heard the last of strike action in Brazil. If it's not the truckers again next week then it will soon be the dockers, silo operators, customs workers or somebody else the week after. Cue headlines telling us how many boats are queueing at Paranagua, Santo etc., and how many days a vessel must wait to get loaded. Cue strikes in Argentina as soon as their export programme gets going. Cue "it's too dry/hot/cold/wet in the Midwest" after that. It's just another average year in the grain markets. In fundamental news, Argentine farmers are said to be 81% sold on their old crop beans and 10% committed on new crop, which is about in line with year ago levels. Next Tuesday brings the March WASDE report from the USDA. US soybean ending stocks are expected to be pared back a little from last month's 385 million bushels. Mar 15 Soybeans closed at $9.79 1/4, unchanged; May 15 Soybeans closed at $9.85, down 1/2 cent; Mar 15 Soybean Meal closed at $337.00, up $2.60; Mar 15 Soybean Oil closed at 31.14, down 29 points. For the week, front month beans shed 51 1/2 cents, meal lost $16.70 and oil slipped 166 points.

Corn: The corn market closed around 3-4 cents lower, with a newly resurgent US dollar doing nobody any favours. The greenback rose to 12-year highs today after bullish jobs data suggested to the market that a US interest rate rise might now not be too far away. News that the Brazilian truckers strike is over leans bearish, So too do reports that planting of Brazil's safrinha corn crop is now 85% complete. Next week's USDA report is expected to trim back US corn ending stocks a little, and maybe "trade off" a possible cut in production in Brazil with a rise in output for Argentina. South Africa's production might also be reduced. The Argentine farmer is said to be fully sold on his old crop corn and around 26% committed on new crop. He was little more than 10% sold on new crop this time last year. Heavy rains have been hampering the early corn harvest in Argentina, which is only 2.7% complete. After next week's WASDE report is out of the way, the next "big thing" will be the USDA's planting intentions report at the end of the month. Chicago brokerage firm Futures International were said to have raised their forecast for US corn plantings this year by 450,000 acres to 88.7 million acres. The Dec 15 corn to Nov 15 soybean price ratio has fallen to 2.35:1 which might lead to corn plantings holding their ground a bit more with soybeans, they suggest. Ukraine said that they'd exported 11.34 MMT of corn so far this season. There's a theory that the economic situation in Ukraine and Russia will see less corn get planted this spring, and that yields might be lower due to reduced fertiliser applications and the use of inferior quality seed. Mar 15 Corn closed at $3.79 1/4, down 3 1/2 cents; May 15 Corn closed at $3.86, down 4 1/2 cents. For the week Mar 15 was down 5 1/4 cents.

Wheat: The wheat market closed a little higher in what was probably pre-weekend consolidation after a week of fairly heavy losses. The Russian Ag Ministry revised upwards their estimate for the 2014 grain crop from 103.8 MMT to 105.3 MMT. They said that output this year would not be less than 100 MMT, despite widespread reports of inferior winter crop conditions, increased levels of winter-kill and tightness of credit to fund spring plantings. Iran bought 85,000 MT of wheat in a tender for March shipment, of which 60,000 MT was German and 25,000 MT Black Sea origin material. Jordan were in the market for 100,000 MT of optional origin wheat for June shipment, but only bought half of that quantity in the end. Taiwan are tendering for 83,950 MT of US wheat for Apr-May shipment. The Argentine grower is said to be 58% sold on his new crop wheat versus 37% this time a year ago. The Indian government said that they will buy 30 MMT of wheat from the nation's growers this year starting Apr 1, to support farming. This will swell the already more than ample state coffers even more. There continues to be talk of India re-entering the export market to make a bit of room prior to the imminent start of the new crop harvest, but current world prices are not really to their liking. Ukraine said that it had exported 24.83 MMT of grains so far this season, of which 9.37 MMT was wheat and 3.87 MMT barley. APK Inform estimated that Ukraine's winter wheat yields could fall almost 25% this year. The strong US dollar remains a thorn in the side of US wheat export hopes. Yesterday's weekly export sales report total of 469,600 MT was pretty good, although it was artificially inflated by sales of subsidised HRW wheat to Egypt. Mar 15 CBOT Wheat closed at $4.85 3/4, up 4 1/2 cents; Mar 15 KCBT Wheat closed at $5.20 3/4, up 6 3/4 cents; Mar 15 MGEX Wheat closed at $5.42, down 5 cents. For the week, Chicago wheat was still 31 3/4 cents lower, with Kansas down 13 3/4 cents and Minneapolis losing 14 cents.