Nogger's Blog

07/05/15 -- Soycomplex: Beans closed lower. The FAO raised their forecast for the world 2014/15 soybean crop from 312 MMT to a new record 316 MMT, up more than 11% on the previous season on the back of near-record yields in South America. Global ending stocks were increased 2 MMT from previously to 48 MMT, a 50% hike compared to 2013/14. MDA CropCast estimated the world soybean crop at 297.9 MMT in 2015/16. They see production in the US at 3.823 billion bushels, a 3.6% fall on last year. They have next year's Brazilian crop at 93.85 MMT versus 94.34 MMT in 2014/15, and see Argentina's at 55.55 MMT versus 56.62 MMT in 2014/15. Customs data shows that Brazil only exported 6.55 MMT of soybeans in April, down 20.6% versus 8.25 MMT in April 2014. Meal exports were also lower at 1.2 MMT versus 1.33 MMT a year previously. Oil World said that Australia's Nov/Mar canola exports were down 23% compared to a year previously at 1.75 MMT. Stategie Grains raised their forecast for the EU-28 rapeseed crop from 21.7 MMT to 21.9 MMT, although that's still 8.5% down compared to a year ago. ADM Germany are a little lower at 21.7 MMT. A Bloomberg survey of 26 traders found 7 bullish, 12 bearish and 7 neutral on soybean prices. Argentine strikes are back on the menu. "The labour situation in Argentina is very chaotic with numerous labour organisations across Argentina either on strike or contemplating striking over wage increases," said Dr Cordonnier. Weekly export sales for beans came in at 338,900 MT on old crop and 350,300 MT for new crop. Exports of 186,700 MT were down 29% from the previous week and 51 percent below the prior 4-week average, but they don't need to be high. The US has already exported 45.6 MMT of soybeans this season, with outstanding sales of a further 3.8 MMT. That takes total commitments to 49.4 MMT, meaning that cancellations are needed unless the USDA raises the export target from the current forecast of 48.7 MMT. May 15 Soybeans closed at $9.81 1/2, down 9 cents; Jul 15 Soybeans closed at $9.75, down 7 1/2 cents; May 15 Soybean Meal closed at $317.40, down $0.20; May 15 Soybean Oil closed at 32.31, down 44 points.

Corn: The corn market closed lower, reversing yesterday's gains. Crude oil pressed onto new highs for the recent move in early trade, but was back in the red by the afternoon. Fears of softening corn demand have the average trade guesses predicting an increase in old crop carryout in Tuesday's WASDE report from USDA. The FAO released their first estimates for the world 2015 corn crop, pegging production at 995 MMT, a 30 MMT or 2.9% decline on last year. This was mostly due to expectations of reduced plantings, especially in the US due to higher profitability of soybeans, they said. The estimate is however hugely higher that the 951 MMT forecast by the IGC late last month. Ending stocks will decline 5 MMT in 2015/16 to 217 MMT, the FAO predict. MDA CropCast are in the same ballpark as the IGC, estimating the world corn crop at 951.7 MMT, of which the US will produce 13.802 billion bushels, a 5.8% fall compared with last year. They see the Brazilian 2015/16 corn crop at 75.3 MMT versus 76.9 MMT this season, with Argentina's at 56.4 MMT compared to 57.6 MMT this year. The CNGOIC said that the country will harvest a record 232 MMT corn crop this year, which is getting on for almost a quarter of the entire global crop and a 7.6% increase on a year ago. The Chinese think tank also said 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 will import about 6.9 MMT of US sorghum in 2014, of which 1.45 MMT still have to be shipped, they said. The Ukraine Ministry said that corn planting there was 72% complete and would be wrapped up in the next 7-10 days. A Bloomberg survey of 25 traders found 9 bullish, 8 bearish and 8 neutral on corn prices. Weekly export sales for corn came in at 841,800 MT on old crop and 55,400 MT for new crop. That was a bit better than trade ideas. May 15 Corn closed at $3.57 3/4, down 8 3/4 cents; Jul 15 Corn closed at $3.61 1/2, down 5 1/4 cents.

Wheat: The wheat market closed lower.The FAO estimated the world wheat crop at 719 MT this year, some 10 MMT below last year's record output. Ending stocks will only fall 1 MMT to 199 MMT though, they predict. They see the US wheat crop at 56 MMT, up 1.6% from 55.1 MMT a year ago. "In the US, winter wheat conditions are of concern as the crop is struggling, particularly in the southern Great Plains centred around the state of Oklahoma. This is due to continued drying that has plagued the area for several years now. Spring wheat planting is on average ahead of schedule," they said. In Canada, production is anticipated to increase to 30 MMT, largely on account of an expected rebound in plantings of the major spring crop. Conditions for the minor winter crop are satisfactory, they added. "In Australia, tentative forecasts point to a return to an average production compared to 2014’s reduced output. In Argentina, following the previous year’s bumper output, plantings in 2015 are tentatively forecast to decrease in response to lower prices," they concluded. MDA CropCast estimated the world wheat crop 2.63 MMT lower than a week ago at 709.6 MMT. They cut their view on US winter wheat production by 8 million bushels to 1.491 billion. Canada was raised 0.59 MMT to 29.2 MMT, but India was dropped 3 MMT to 89.3 MMT. CNGOIC estimated China's 2015 wheat crop at 127 MMT, a 0.9% rise on last year. A Bloomberg survey of 25 traders found 12 bullish, 7 bearish and 6 neutral on wheat prices. Day two of the Wheat Quality Council’s crop tour found average yields in Kansas of 34.5 bu/acre, better than 34.3 bu/acre yesterday, but nothing to write home about. It is however an improvement on only 30.8 bu/acre on day two last year. Weekly export sales came in negative again for the old crop year that finishes at the end of the month, at -148,200 MT. New crop sales were 446,800 MT. May 15 CBOT Wheat closed at $4.65 3/4, down 10 cents; May 15 KCBT Wheat closed at $4.98 3/4, down 2 1/2 cents; May 15 MGEX Wheat closed at $5.18, down 9 cents.