Nogger's Blog

01/05/15 -- Soycomplex: Beans closed lower on the day, but little changed for the week. Fresh news was scarce with many countries closed for the May Day holiday. The US dollar, which has been weaker for the past few days following the release of disappointing growth numbers earlier in the week, put in a bit of a recovery, which was a negative for the grains complex as a whole. The market is now fixed on the US weather and Monday's crop progress report. Monday will also bring the usual weekly export inspections numbers. The trade is thinking that the 2015 US soybean crop could be around 10-15% planted in Monday night's report, up from only 2% done a week ago. Most of this week's efforts are expected to have concentrated on getting the corn crop in. The harvest in South America is wrapping up, with Argentina now around two thirds done, and production estimates starting to hit the magical 60 MMT mark (and a new record) - the USDA were only at 57 MMT last month. Their revised numbers are out on May 12. The Brazilian grower has 61% of his 2014/15 soybeans sold, according to AgRural. That's less than the 69% committed that they were this time a year ago. Sales have slowed up after the Brazilian real has firmed. "Two months ago when it was trading at 3.2 Brazilian reals to the dollar, Brazilian farmers were very pleased with the resulting increased prices being paid for their soybeans and corn. That optimism has now turned into a worry as the Brazilian currency strengthens against the dollar. It is now trading at 2.94 to the dollar and as a result, commodity prices in Brazil have declined," said Dr Cordonnier. The Argentine grower is said to be 28% sold versus 23% this time a year ago. The Canadian canola crush was down 16% week-on-week, whilst their soybean crush was up 15%. Tonight's Commitment of Traders report shows fund money reducing the size of their short position in beans to a tad over 32k lots for the week through to Tuesday night. A Bloomberg survey of 17 traders found that 9 were currently bullish on soybean price prospects, 7 were bearish and one was neutral. May 15 Soybeans closed at $9.68 1/2, down 10 cents; Jul 15 Soybeans closed at $9.64 3/4, down 11 1/4 cents; May 15 Soybean Meal closed at $314.70, down $4.20; May 15 Soybean Oil closed at 31.44, down 7 points. For the week that puts front month beans 1 1/4 cents lower, with meal up 10 cents and oil down 23 pips.

Corn: The corn market ended around 2-3 cents lower on the day, and around 5 cents easier for the week. Many are suggesting that US corn planting could be past halfway in Monday night's crop progress report versus only 19% done a week ago. Not everybody is convinced that such large progress will have been made though. "Soil temperatures last week were too cool for corn planting on many Midwest farms, but strong warming is predicted the first week of May. Soil temperatures would rapidly increase above 50 F throughout the Midwest, the threshold temperature for corn germination. Strong showers and thunderstorms may hinder planting efforts this weekend, however. Recurring showers and thunderstorms are predicted in wide swath of Nebraska, spreading east across Iowa into northern Illinois. Scattered strong showers would be possible most everywhere in the Midwest in an unstable atmosphere. A trough of low pressure would stall in the Midwest keeping conditions unstable and ripe for showers," said Martell Crop Projections. Ukraine said that they'd exported 14.6 MMT of corn so far this season. Corn plantings for the 2015 harvest are 24% complete on 1.93 million ha, 27% down versus the 2.66 million ha that had been sown this time last year. Full season corn harvesting is said to be around 80% complete in the south of the Brazil. "The outlook for Brazil’s second corn produced in the off season is decidedly mixed. Mato Grosso prospects are favourable due to exceptionally wet conditions in April, but the Parana corn outlook is fair to poor with inadequate soil moisture. The disparity between the two top corn states is evident in a late April satellite vegetation image. The two states grow roughly 70% of Brazil’s winter corn planted after the soybean harvest is finished," Martell Crop Projections say. Harvesting in Argentina is approaching a third complete. Tonight's Commitment of Traders report shows spec money adding around 27k contracts to their overall short position in corn which stood at almost 93k lots as of Tuesday night. May 15 Corn closed at $3.59 3/4, down 2 3/4 cents; Jul 15 Corn closed at $3.63, down 3 1/4 cents. The May 15 contract was down 4 3/4 cents versus last Friday and the Jul 15 lost 6 3/4 cents. The new crop soybean:corn price ratio finished the week at 2.47:1 versus 2.45:1 a week ago, favouring increased soybean planting at the expense of corn. A Bloomberg survey of 17 traders found that 11 were currently bullish on corn price prospects, 3 were bearish and 3 were neutral.

Wheat: The wheat market closed mixed on the day, but was universally lower across the three exchanges for the week. The lack of interest in US wheat on the international stage continues to be the main concern following yesterday's dismal old crop weekly export sales. South Korea passed on a tender to import 50,000 MT of US wheat overnight, rubbing salt into the wound. The dollar staged a bit of an about turn too, which won't help either. Egypt's GASC have been largely absent from the international market of late given the dip in prices to 5-year lows. They are now busy harvesting their own 2015 crop, and are said to have bought around 700,000 MT on the domestic market since they began buying local wheat about two weeks ago. Their aim is to buy 3.7 MMT of domestic wheat this year, and as they are currently paying the equivalent of around $365/tonne then they should certainly get it. The world's largest wheat buyer is aiming to be less reliant on imports in the future. Morocco are hoping to do likewise. The recently announced hike on import duties for wheat to 75% kicked in today. They're obviously confident of a large leap in domestic production this year, with total grain output forecast 62% higher at a record 11 MMT. The annual Wheat Quality Council crop tour kicks off next week, with wheat production currently estimated at around 300 million bushels in the top producing state of Kansas, versus 246 million last year. The tour's forecast for the state is due to be released next Thursday. They will also visit Oklahoma, Nebraska and Colorado. Ukraine said that they'd exported 29.3 MMT of grains so far this season, including 10 MMT of wheat. ADM German estimated the soft wheat crop there down 7.3% this year at 25.68 MMT. They see production in the EU-28 as a whole down 6.3% at 139.14 MMT. "Producers have begun planting wheat in Saskatchewan, Canada’s largest farm province, with 2% of wheat was in the ground by April 27th. Strong warming is predicted this week in Saskatchewan and the prairies provinces at large, accelerating planting. Mike Jubinville the editor of Pro Farmer in Canada claims producers intend to plant more wheat this year, 3.9% higher than 2014," said Martell Crop Projections. A Bloomberg survey of 16 traders found that 9 were currently bullish on wheat price prospects, 2 were bearish and 5 were neutral. The Commitment of Traders report shows fund money increasing the size of their already record short in CBOT wheat for the week through to Tuesday night. May 15 CBOT Wheat closed at $4.70, up 3 cents; May 15 KCBT Wheat closed at $4.93 1/4, up 3 cents; May 15 MGEX Wheat closed at $5.20 1/4, down 3 cents. For the week that puts CBOT wheat 16 cents lower, with Kansas down 9 cents and MGEX losing 14 3/4 cents.