Nogger's Blog

08/04/15 -- Soycomplex: Beans closed narrowly mixed ahead of tomorrow's WASDE report from the USDA. It seems like the trade has positioned itself where it wants to be ahead of the release of that. The trade is expecting US 2014/15 soybean ending stocks to come in at 370 million bushels, from within a range of estimates of 347-399 million and the USDA March estimate of 385 million. For world ending stocks the average trade estimate is 89.53 MMT, from within a range of estimates of 88.00-91.15 MMT and exactly the same as the USDA March estimate. Production in Argentina is seen at 57.23 MMT, from within a range of estimates of 55.5-60.2 MMT and versus the USDA March estimate of 56.0 MMT. Brazil is seen at 94.18 MMT, from a range of estimates of 93.0-95.0 MMT and versus the USDA March estimate of 94.5 MMT. Overall, not a huge amount of change then. In other global news, FCStone estimated Brazil’s 2014/15 soybean crop at 93.6 MMT. Conab will release their updates on Friday. A major fire at a fuel storage facility at the Brazilian port of Santos is seen causing a few disruptions to shipments of beans and grains. APK Inform estimated Ukraine's 2015 soybean crop up 4.1% at 4.04 MMT. Output of sunflower and rapeseed will decline sharply this year, down 5.5% and 32.3% respectively, they added. Ukraine farmers will cut back on fertiliser usage this year as a cost saving measure, resulting in reduced yields, they predict. The 2015 Ukraine soybean area is actually seen rising by 19% over last year. The USDA will also release their regular Thursday weekly export sales report tomorrow. For beans the trade seems to be expecting something around zero on old crop, and maybe 500 TMT on new crop. May 15 Soybeans closed at $9.71 1/2, up 1/2 cent; Jul 15 Soybeans closed at $9.76 1/2, up 1/4 cent; May 15 Soybean Meal closed at $319.90, up $0.20; May 15 Soybean Oil closed at 30.95, down 8 points.

Corn: The corn market closed a bit lower heading into tomorrow's USDA report. Unlike beans, US 2014/15 corn carryout is expected to rise from what was predicted a month ago. The average trade guess for that is 1.854 billion bushels, from within a range of estimates of 1.750-1.999 billion and versus the USDA's March estimate of 1.777 billion. Global ending stocks are also seen climbing, with the average trade estimate at 186.91 MMT, from within a range of estimates of 184.70-191.00 MMT and up from the USDA's March estimate of 185.28 MMT. Production in Argentina is seen rising to 23.90 MMT, from a range of estimates of 22.00-29.30 MMT and the USDA March estimate of 23.50 MMT. Brazil's crop is seen little changed at 74.82 MMT, from a range of estimates of 73.0-77.4 MMT and versus the USDA March estimate of 75.0 MMT. FCStone estimated the Brazilian crop at 75.5 MMT today, up from 74.9 MMT previously. CNGOIC said that China will import 4 MMT of DDGs, 7.0 MMT of barley (up 40% from a year ago), and 8.1 MMT of sorghum (nearly double that of a year ago) in 2014/15. The USDA's FAS in South Korea said that the country would import 9.8 MMT of corn in 2015/16, up 0.2 MMT from this season. The US share of that business will increase from 40% to 41%, they predict. Indonesia's 2015/16 corn imports are seen falling 0.5 MMT to 3.0 MMT next season. APK Inform estimated corn production in Ukraine at 24.3 MMT this year, a drop of 14.7% on last year, partly due to reduced plantings of the input hungry crop (these are seen falling 8%), but also on the back of lower anticipated yields. Crude oil suffered a bad day at the office, which had a negative drag on corn prices today. WTI crude fell more than $3.50/barrel, or 6.6%, to close at $50.42/barrel. The catalyst was the US Department of Energy reported the largest crude oil build since 2001, with crude stocks rising 10.9 million barrels in the week ending April 3, reaching a new record high of 482.4 million barrels. Weekly ethanol production fell 16,000 barrels/day to 936k bpd, which was also bad news for corn. Trade ideas for tomorrow's weekly export sales are around 400-650 TMT. May 15 Corn closed at $3.79 1/4, down 3 3/4 cents; Jul 15 Corn closed at $3.87 1/4, down 3 3/4 cents.

Wheat: The wheat market closed mostly a little bit lower, pressured by falling corn prices. Tomorrow's WASDE report isn't expected to throw up any startling changes, with the average trade estimate for US 2014/15 ending stocks at 692 million bushels versus the USDA March estimate of 691 million. There is some difference of opinion there though, with the range of estimates being 671-721 million. It's a similar story for the global ending stocks picture, with the average guess of 197.51 MMT little changed from the USDA March estimate of 197.71 MMT. The range of estimates for that are195.40-199.00 MMT. APK Inform pegged the 2015 Ukraine wheat planted area up 10% on last year, although reduced inputs (and the resultant lower yields) still mean that production will decline 2.1% to 23.6 MMT, they said. Barley plantings are seen down 6%, with production falling 17.8% to 7.44 MMT, they added. Pakistan said that they expect to harvest 26 MMT of wheat this year, up from 25.29 MMT a year ago. The USDA's FAS in Indonesia estimated that the country will import 8.1 MMT of wheat in 2015/16, up 5.2% from 7.7 MMT this season. Australia are likely to be the main beneficiary of this as they currently supply more than half of the country's import needs. FranceAgriMer forecast increased French soft wheat exports (18.26 MMT versus 18.03 MMT previously), although they left ending stocks unchanged at 3.58 MMT which is more than 50% up on a year ago. Rusagrotrans said that Russia had shipped out 534 TMT of wheat in March, up from 461 TMT in February. They see April exports falling to around 400 TMT. The Russian Ag Minister said that no decision will be made on cancelling the wheat export duty for a while yet, and hinted that it may even be extended. They are still predicting a Russian grain crop of 100 MMT this year. That's only down modestly from around 105 MMT last year, yet winter crop conditions are said to be pretty poor, and growers there face similar financial obstacles to their Ukraine counterparts. Trade thoughts on tomorrow's weekly export sales report are around 200-450 TMT. May 15 CBOT Wheat closed at $5.26 1/4, up 1/4 cent; May 15 KCBT Wheat closed at $5.61 1/4, down 4 cents; May 15 MGEX Wheat closed at $5.80 1/2, down 3 cents.