Nogger's Blog

08/05/15 -- Soycomplex: Beans closed with small gains on the day and higher for the week. The Buenos Aires Grain Exchange say that the Argentine soybean crop is 68.6% harvested, up 6.8 points on the week and 4.6 points ahead of a year ago. Their estimate for production was maintained at a record 60 MMT. The Argentine Ag Ministry said that farmers there are 31% sold on beans versus 25% done this time last year. The Rosario Grain Exchange say that Argentine soybean yields in the core area have been coming in 25% ahead of last year. Chinese customs data puts their soybean imports at 5.31 MMT in April versus 4.49 MMT in March. Year on year imports for the first 4 months of 2015 are down 4% at 20.9 MMT. China will have to import 35.3 MMT of soybeans for the remainder of the year (up 14% from the 30.9 MMT imported in the same period last year), in order to match the USDA's forecast. This is fuelling ideas that China will not reach estimates on imports, said Benson Quinn. The trade will be looking to see how soybean planting got on this week in Monday's crop progress report from the USDA. Last week plantings were 13% complete, up from only 2% a week previously, and above both last year (5%) and the previous 5-year average of 9% done. I guess that plantings could now be around 25% complete. After that we get the WASDE report on Tuesday. 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. The Commitment of Traders report shows fund money reducing their net short on beans by the best part of 3k contracts for the week through to Tuesday night. Their net short is now around 29k lots. May 15 Soybeans closed at $9.84 1/2, up 3 cents; Jul 15 Soybeans closed at $9.76 1/4, up 1 1/4 cents; May 15 Soybean Meal closed at $315.20, down $2.20; May 15 Soybean Oil closed at 32.80, up 49 points. For the week, front month beans were up 16 cents, meal was the weakest link adding just half a dollar whilst oil gained 136 points.

Corn: The corn market closed slightly higher on the day, but a little lower for the week. The Buenos Aires Grain Exchange said that the Argentine corn harvest only advanced 1.1 points to 29.5% done this week. They were unchanged on their production estimate at 25 MMT. The Argentine Ag Ministry said that farmers there are 43% sold on their corn crops versus 34% done this time last year. Taiwan purchased one cargo of optional origin corn for Oct/Nov shipment in a tender. FranceAgriMer said that the 2015 French corn crop was 82% planted, up 7 points in a week and 4 ahead of this time last year. Benson Quinn suggest that US corn plantings could be 70-75% complete as of Sunday night, although other estimates I have seen are as high as 85%. 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. The USDA are expected to add 2 MMT to the Brazilian crop and 1 MMT to the Argentine crop, according to Benson Quinn. China's CNGOIC said yesterday that the country's corn imports will fall to just 2 MMT in 2015/16, half of what they are expected to buy in the current season. China's sorghum imports will be more than four times higher than that at 8.2 MMT (up from 8.0 MMT this season), as their quest for alternative grains to corn continues, they added. Their own corn crop is forecast at a record high this year, and government stocks will build to burdensome levels, they predict. AgRural raised their forecast for the Brazilian corn harvest in the centre-south of the country to 45.8 MMT from 42.1 MMT previously. The EU has authorised 7.95 MMT of corn for import so far this season, down 35% compared to 12.3 MMT this time last year. Fund money continues to sell corn short, and now has a net liability of almost 117k contracts. May 15 Corn closed at $3.58 1/2, up 3/4 cent; Jul 15 Corn closed at $3.63, up 1 1/2 cents. For the week, May 15 was down 1 1/4 cents.

Wheat: The wheat market closed higher on the day and also for the week across all three exchanges. The Wheat Quality Council's crop tour pegged the Kansas wheat crop at 288.5 million bushels. That's 17% up on last year but around 10 million below trade expectations. A Kansas farmer told Bloomberg that April rains had arrived just in the nick of time to help save the state's wheat crop. "If it wasn’t for the rain starting about three weeks ago, we would have hardly anything. It was that critical. We were on the verge of disaster again,” he was quoted as saying. The Council's production figure is better than last year's 246.4 million but below the 313.6 million that is the 5-year average. Quality issues with what they have seen were also reported to be widespread. This will have heavily short fund money a little anxious. Tonight's Commitment of Traders report shows the spec community to have added 4,496 contracts to their already record net-short position in Chicago wheat for the week through to Tuesday night. They are now short of more than 111k lots. "Hard red wheat in the southern Great Plains is getting socked with heavy rainfall, developing into too much of a good thing in Texas and Oklahoma where flooding has developed," said Martell Crop Projections. "A trough of low pressure became entrenched over the Southwest United States spinning out wave after wave of showers into the southern Great Plains. Oklahoma and West Texas rainfall has added up to 6-8 inches but up to 10 inches locally in the past 2 weeks. The forecast is still wet in the Southern Great Plains. However, rainfall next week would be less heavy than previously," they added. Too much rain isn't the only thing for the shorts to be concerned about. "Potential freezing temperatures into Tuesday morning will be watched as they may slide far enough south to catch portions of the hard red winter wheat crop in western Nebraska and north west Kansas," said Benson Quinn. The Argentine Ag Ministry said that farmers there are 72% sold on their wheat versus 50% done this time last year. May 15 CBOT Wheat closed at $4.76 1/2, up 10 3/4 cents; May 15 KCBT Wheat closed at $5.10 1/2, up 11 3/4 cents; May 15 MGEX Wheat closed at $5.28 1/2, up 10 1/2 cents. For the week that puts CBOT wheat 6 1/2 cents higher, with Kansas up 17 1/4 cents and MGEX rising 8 1/4 cents.