Nogger's Blog

06/05/15 -- Soycomplex: Beans closed mixed in subdued trade. Stats Canada reported Mar 31 canola stocks at 7.04 MMT, down from 8.68 MMT a year ago and below the average analyst estimate of 7.4 MMT. "World inventories of soybeans probably will rise to a record before the 2016 Northern Hemisphere harvest," said Bloomberg News in a survey of as many as 18 analysts and trading firms. That put the average guess for world stocks on 1 Oct 2016 at 95 MMT. Another Bloomberg survey put US soybean stocks at the end of 2015/16 at 446 million bushels - the highest in nine years. Yet another Bloomberg survey into US crop production in 2015 put this year's soybean crop at 3.829 billion bushels, down 3.5% from last year's record 3.969 billion. The range of guesses was pretty wide, as you might expect at this very early stage in the season. The highest guess in the ring was 4.187 billion, which would eclipse last year's production by 5.5%. The lowest estimate was 3.7 billion, a 6.8% drop on a year ago. The US weather pattern continues to suggest a developing El Nino signal. "The Midwest forecast is very wet. An unstable weather front would stall out across the corn belt stretching from Nebraska to Ohio, guaranteeing heavy rainfall on most farms," said Martell Crop Projections. "Very strong showers are predicted in Nebraska, Iowa, and Illinois, at least 1.75 inches of rain, but up to 2.5 inches locally, with recurring thunderstorms," they forecast. Strong warming is also expected in the week ahead, they added. Trade estimates for tomorrow's weekly export sales for beans are all over the place, from zero to as much as 850 TMT. May 15 Soybeans closed at $9.90 1/2, down 3 cents; Jul 15 Soybeans closed at $9.82 1/2, down 2 1/4 cents; May 15 Soybean Meal closed at $317.60, down $0.50; May 15 Soybean Oil closed at 32.75, down 13 points.

Corn: The corn market settled around 3-5 cents higher. Crude oil closed back above $60/barrel for the first time in almost 5 months, helping corn's cause. There may also have been some short-covering today, with funds finishing up as net buyers of around 7,000 contracts. The wet forecast for the US is a mixed blessing, and may hold up some corn planting. "Many Midwest corn farms have dry field conditions reflecting prolonged drought previously. Heavy soaking rainfall would be highly beneficial, restoring field moisture in the deep soil layer, while also interrupting corn planting," said Martell Crop Projections. In Brazil, total corn production estimates are rising, with Informa yesterday adding 5.6 MMT to their estimate for the South American powerhouse. "Brazil corn production estimates keep improving, as winter corn grown as a second crop has improved to unusually wet weather in the tropics. Ample rainfall has continued beyond the summer wet season in Mato Grosso, the largest corn state," said Martell Crop Projections. The same Bloomberg surveys referred to above found a world corn stocks estimate on 1 Oct 2016 of 185.19 MMT, with US 2015/16 ending stocks of 1.759 billion bushels, and US 2015 production of 13.58 billion bushels. The latter figure would be a 4.5% fall on last year's record output. The US Energy Dept reported a fall in weekly US ethanol production from 921,000 barrels/day last week to 881,000 bpd this time round. That was the lowest weekly grind reported since October. Russia estimated their 2015 corn crop to be 47.4% planted on 1.3 million ha, which is 0.2 million less than a year ago. May 15 Corn closed at $3.66 1/2, up 5 1/4 cents; Jul 15 Corn closed at $3.66 3/4, up 4 cents.

Wheat: The wheat market closed with double digit gains on short covering. Reports back from the first day of the Wheat Quality Council’s crop tour pegging yields in that part of Kansas and Nebraska at the lowest since 2001 at 34.3 bu/acre had shorts scrambling for cover. Tour participants are said to be finding a lot of stripe rust and winter kill. Weather on the US Plains is suddenly turning much wetter, but is it too late to be of much use to winter wheat? "Heavy rainfall is predicted in the US breadbasket where hard red winter wheat is grown. Four to six times average rainfall is expected in the upcoming week, though with a semi-arid climate 'above average' rainfall is not exceptionally large," said Martell Crop Projections. Other bullish input today came from the news that Canadian wheat stocks were lower than market expectations. Stats Canada placed Mar 31 stocks at 16.7 MMT, down 25% from 22.3 MMT a year previously, and below the average trade forecast of 17.3 MMT in a Bloomberg survey. Canadian barley stockpiles fell 23% year-on-year to 3.38 MMT, they added. Another Bloomberg survey pegged global wheat stocks as of 1 Jun next year at 194.5 MMT, with US 2015/16 ending stocks at 751 million bushels. The USDA will release their first global and US production estimates for 2015/16 on Tuesday next week. The USDA's FAS in Canada estimated the wheat crop there (excluding durum) at 29.55 MMT this year, up slightly on a year ago, but predicted 2015/16 exports to fall 0.7 MMT to 22.2 MMT. The USDA's FAS in India cut their forecast for wheat production there this year by 5 MMT to 87 MMT, and said that the country could finish up as a net wheat importer in 2015/16 for the first time in 5 seasons. Algeria tendered for 50,000 MT of optional origin hard wheat. Russia said that it's spring wheat crop is only 7.5% planted. May 15 CBOT Wheat closed at $4.75 3/4, up 11 3/4 cents; May 15 KCBT Wheat closed at $5.01 1/4, up 15 cents; May 15 MGEX Wheat closed at $5.27, up 13 3/4 cents.