Nogger's Blog

24/04/15 -- Soycomplex: Beans, meal and oil all closed lower on the day, but virtually unchanged for the week. The trade seems to be trying to balance the positive impact of renewed strike action in Brazil against improved production prospects, the advancing harvest in South America and the worsening US bird flu situation. Argentina's Ag Ministry now estimate the nation's 2014/15 soybean crop at a record 59.0 MMT versus a previous estimate of 58.0 MMT and the 2013/14 crop of 53.4 MMT. The Buenos Aires Grain Exchange estimated the soybean harvest in Argentina to now be 46% complete. up 13.5 percentage points in a week and 3.5 points ahead of this time last year. They have production estimated slightly lower than the government at 58.5 MMT. The IGC yesterday increased their forecast for the Argentine crop by 1.5 MMT to 58 MMT and added 1 MMT to their outlook for Brazil at 94.3 MMT. A Bloomberg survey of 17 traders found only two that were bullish on soybean price prospects going forward, 12 were bearish and 4 neutral. Stats Canada yesterday estimated the 2015 Canadian canola area at 19.416 million acres versus an average trade estimate of 20.2 million and the 2014 area of 20.325 million. Soybean plantings also came in below expectations at 5.375 million acres versus the average estimate of 6.0 million and the 2014 area of 5.562 million. That would be the first decline in Canadian soybean plantings in 8 years. Monday brings the usual weekly export inspections numbers from the USDA. Inspections last week were modest at 147,939 MT versus 450,365 MT the previous week. It is unclear whether there will be any inclusion of soybeans in Monday's planting progress report, with corn planting behind schedule they may elect to delay those for beans for another week. The weekly commitment of traders (COT) report shows fund money cutting their net short position in beans to around 47,500 lots. May 15 Soybeans closed at $9.69 3/4, down 8 1/2 cents; Jul 15 Soybeans closed at $9.70 3/4, down 9 1/4 cents; Sep 15 Soybeans closed at $9.56 1/4, down 9 1/4 cents; May 15 Soybean Meal closed at $314.60, down $2.00; May 15 Soybean Oil closed at 31.67, down 35 points. For the week, front month beans added one cent, meal fell $0.40 and oil gained 15 points.

Corn: The corn market closed lower on the day and for the week. Bird flu has been the over-riding bearish factor this week, it has now been found in at least 60 commercial poultry flocks in the US. "The majority are turkeys, and Minnesota, the nation’s top producer, has been hit hardest with an estimated 2.6 million causalities," reported Bloomberg. Argentina Ag Ministry estimated the country's 2014/15 corn crop at 30.0 MMT, unchanged from their previous estimate. The IGC agree with them at 30 MMT, although others aren't as bullish. The Buenos Aires Grain Exchange go for 23 MMT, unchanged on a week ago. They say that the harvest there only advanced 1.5 percentage points on a week ago to 25.7% complete. MDA CropCast go for production of 23.5 MMT in Argentina this year. They cut their outlook on the world 2015/16 corn crop by 2.4 MMT from a week ago to 951.7 MMT, representing a 2.4% fall on a year ago. That was mostly down to a 2.6 MMT reduction in Ukraine where they now go for a crop of 24.3 MMT, a 14.4% decline compared to last year. They also trimmed back their outlook on the US a little, down to 13.822 billion bushels. The IGC yesterday estimated the 2015/16 global corn crop at 951.0 MMT, up 10 MMT from a previous estimate of 941.0 MMT, but down 4.3% compared to the 2014/15 production of 994.0 MMT. Ending stocks were also seen up 10 MMT from a month ago at 181 MMT, although again that's down from 198 MMT in the current marketing year. Stats Canada yesterday estimated Canadian corn plantings this year at 3.689 million acres versus an average trade estimate of 3.1 million and up almost 20% compared to the 2014 area of 3.078 million. South Korea's KOCOPIA were said to have bought 53,000 MT of European origin corn for August shipment. Ukraine said that they had exported 14.1 MMT of corn so far this season compared to 18.4 MMT this time a year ago. Russia said that growers there had planted 18.6% of this year's anticipated corn crop. The trade is thinking that the US might have planted around 20% of it's expected corn area in Monday night's crop progress report from the USDA. It was 9% done a week ago. A Bloomberg survey of 17 traders found 5 that were bullish on US corn price prospects, 10 were bearish and 2 neutral. The latest COT report shows fund money net short more than 65k corn contracts as of Tuesday night, around 17k more than a week ago. May 15 Corn closed at $3.64 1/2, down 6 1/4 cents; Jul 15 Corn closed at $3.69 3/4, down 7 cents. For the week front month corn shed 15 1/4 cents.

Wheat: The wheat market closed with double digit losses on the day and mixed for the week. The world wheat crop seems to be trending lower for 2015/16, with the IGC yesterday knocking 4 MMT off last month's production estimate to 705 MMT. Those losses came courtesy of India, China and Argentina, although there were increases for the EU, Russia and Ukraine. MDA CropCast trimmed their outlook by 1.8 MMT from a week ago, largely thanks to a reduction of the same magnitude for Kazakhstan. They also reduced their outlook for the 2015/16 US winter wheat crop by 41 million bushels from a week ago to 1.5 billion bushels due to dryness on the Central Plains. Stats Canada said yesterday that the nation's all-wheat acres are expected to see an overall 3.9% increase to 24.765 million acres in 2015. The average trade guess was 24.2 million and the 2014 area was 23.835 million. Lanworth estimated the 2015 Canadian all wheat crop at 31.1 MMT. The IGC yesterday said 30.0 MMT versus 30.4 MMT previously and 29.3 MMT a year ago. MDA CropCast only see Canada at 28.3 MMT this year. Stats Canada forecast that barley plantings are expected to increase 10.2% to 6.478 million acres, after reaching a record low 5.880 million in 2014. The average trade guess for those though was 6.7 million. Ukraine said that they'd exported 9.9 MMT of wheat so far this year versus only 8.2 MMT this time a year ago. Barley exports are also up at 4.3 MMT versus 2.2 MMT in 2013/14. A Bloomberg survey of 17 traders found 5 that were bullish on US wheat price prospects, 5 were bearish and 7 neutral. Monday night's crop progress and condition ratings for wheat will make interesting reading, given that many were expecting a 2 point improvement in winter wheat last week. They didn't get that last week, with the USDA leaving things unchanged at 42% good to excellent. The crop maybe didn’t have enough time to show the benefits of rains late the previous week, suggested Benson Quinn at the time. Maybe that improvement will therefore come this week? What we do know from last week is that spring wheat plantings are racing ahead, at 36% done versus 17% the previous week, 19% for the 5-year average and only 9% complete this time last year in last Monday's report. Look for that trend to continue this week. Fund money added to their record Chicago wheat short position in the week through to Tuesday night the COT report shows. May 15 CBOT Wheat closed at $4.86, down 11 3/4 cents; May 15 KCBT Wheat closed at $5.02 1/4, down 14 1/4 cents; May 15 MGEX Wheat closed at $5.35, down 10 1/4 cents. For the week that puts the Chicago market 8 1/2 cents lower, with Kansas wheat down 30 1/2 cents and Minneapolis a net gainer of 2 1/4 cents.