Nogger's Blog

11/05/15 -- Soycomplex: Beans closed with small losses in light positioning ahead of tomorrow's May WASDE report from the USDA. News that China cut interest rates for the third time in the past six months over the weekend was seen as mildly supportive, although many doubt how effective taking another 0.25% off will be. Chinese interest rates are now 5.1%. The move came to stimulate growth, which slowed to 7.4% in 2014. In most other places that would be an achievement, but not in China where it was actually the slowest pace in 24 years. The IMF sees Chinese growth leveling out at around 6% by 2017, so the weekend interest rate change might make little difference. China of course are the world's largest soybean buyer by some considerable distance, accounting for around two thirds of global trade in the oilseed. The USDA reported weekly soybean export inspections of 263,263 MT, which were better than a year ago and last week. Indonesia, Pakistan and Mexico were the largest homes. Aboive raised their forecast for the 2014/15 Brazilian soybean crop from 92.3 MMT to 92.7 MMT. Soybean exports were kept unchanged at 48 MMT. After the close the USDA reported soybean plantings in the US had jumped from 13% complete to 31% done in the past week. That's better than 18% a year ago and 20% for the 5-year average. All eyes are now on the weather, which has a wetter lean to it, and tomorrow's WASDE report. Estimates for that include an average of 3.829 billion bushels for new crop US production, down 3.5% on the record 3.969 billion achieved last year. 2014/15 US ending stocks are estimated at 362 million bushels compared to 370 million in April. World old crop ending stocks are estimated at 90 MMT versus 89.6 MMT in April. May 15 Soybeans closed at $9.83, down 1 1/2 cents; Jul 15 Soybeans closed at $9.74, down 2 1/4 cents; May 15 Soybean Meal closed at $312.10, down $3.10; May 15 Soybean Oil closed at 33.04, up 24 points.

Corn: The corn market closed around 2-3 cents lower. Weekly corn export shipments came in at 1.1 MMT, a bit above last week but slightly below the same week last year. China's interest rate move is unlikely to do anything for their corn imports, which are seen at only 2 MMT next season, most of which will probably come from South America/Ukraine. China announced that they will auction 3.83 MMT of state-owned corn stocks this week. APK Inform said that Ukraine seaports shipped out 2.5 MMT of grains in April, the majority of which (1.9 MMT) was corn as they now major on that grain. Ukraine spring plantings of corn are said to be 72% complete on 3.2 million ha, according to their Ag Ministry. Israel tendered for 85,000 MT of optional origin corn, and Taiwan are in for 130,000 MT of similar for June/July shipment. Safras e Mercado increased their projected Brazilian corn production estimate to a record 82.3 MMT. That's way ahead of the USDA's current estimate of only 75 MMT. They of course get a chance to alter that tomorrow, but it's probably unlikely that they would go for a hike of 7.3 MMT all in one go. The Safras figure comes despite a smaller planted area than a year ago. Trade forecasts for Tuesday's WASDE report have US 2014/15 corn ending stocks at 1.864 billion bushels, up from 1.827 billion in the April WASDE report. US 2015 corn production is estimated at 13.580 billion bushels, from within a range of forecasts of 13.257-13.944 billion and down 4.5% from 14.216 billion a year ago. World ending stocks are estimated to grow by 1.5 MMT from the April WASDE report to 190 MMT. After the close the USDA reported US 2015 corn planting at 75% complete, up from 55% done a year ago. Progress this time last year was only 55% and the 5-year average pace is 57%. Corn planting could be hampered by showers and wet field conditions this wee though, say Martell Crop Projections. Summer-like temperatures this past week will also have promoted rapid corn germination, they added. The USDA now say that 29% of the crop is emerged, up from 9% a week ago, 16% a year ago and 24% for the 5-year average. May 15 Corn closed at $3.58 1/4, down 1/4 cent; Jul 15 Corn closed at $3.60 1/2, down 2 1/2 cents.

Wheat: The wheat market closed with small losses. A weaker US dollar was supportive. Weekly export inspections of 378,407 MT were a bit better than last week, but well below year ago levels. Year to date inspections of 21.45 MMT are down almost 28% on this time a year ago. "Hard red winter wheat farms in the Southern Great Plains would continue wet for the 3rd straight week. Soaking rainfall in Kansas disrupted the wheat tour last week causing muddy field conditions. Kansas producers would have preferred the heavy soaking rain earlier this spring, as wheat development has already advanced into the heading stage. Heavy, recurring showers Great Plains and Midwest may be consequence of a strengthening El Nino. This climate anomaly is a heavy rain maker for the central United States," said Martell Crop Projections. Have these rains done a lot of good, or have they generally come a little bit to late? The USDA tonight raised the proportion of the US winter wheat crop rated good to excellent only one percentage point to 44%, but up sharply on 30% a year ago. Crop maturity is ahead of last year (42%) and the 5-year average (45%) with 56% of the crop at the heading stage. Spring wheat planting meanwhile raced to 87% compete versus 75% a week ago, only 33% a year ago and 51% for the 5-year average. ProZerno forecast Russia's 2014/15 wheat exports at 20.1 MMT, which is lower than the USDA's current 20.5 MMT estimate. The Russian analysts see 2014/15 wheat carryover at a record 8.1 MMT, and the USDA are even higher at 8.6 MMT. ProZerno's forecast for Russia's 2015 wheat crop is 54.4 MMT, down from 59.1 MMT a year ago. The USDA will give us their first forecasts for Russian and global 2015 production levels tomorrow. The large carryover that ProZerno are forecasting would take total wheat availability in Russia up to the same level (62.5 MMT) as a year ago. The Russian Ag Ministry said that spring wheat planting there is only 12.1% complete so far. The US reportedly donated 100 TMT of wheat to Jordan to help with the Syrian refugee crisis. Brazil's Emater are forecasting wheat planting in Rio Grande do Sul to fall 19% this year. Despite that drop, output could actually increase 36% if the weather co-operates as last season was a complete disaster, they say. Planting in RGdS is just getting underway, and is already around 30% complete in Parana, says Dr Cordonnier. If they get favourable weather then Brazil could achieve a national crop of a record 7.5 MMT in 2015/16, he adds. May 15 CBOT Wheat closed at $4.76 1/4, down 1/4 cent; May 15 KCBT Wheat closed at $5.09 1/2, down 1 cent; May 15 MGEX Wheat closed at $5.25 1/2, down 3 cents.