Nogger's Blog

12/05/15 -- Soycomplex: Beans closed sharply lower following the release of the May WASDE report from the USDA. In that they raised their outlook on Argentine production in 2014/15 from 57 MMT to a record 58.5 MMT. Although that will drop back to 57 MMT in 2015/16, increased output from Brazil will more than compensate for that decline. Brazil's crop in the year ahead will rise to a new record 97 MMT, they predict. The US 2015 soybean crop was estimated at 104.8 MMT, a modest 3% decline on last year's record crop, they said. US soybean exports in the current season were tweaked a little higher, up from the 48.7 MMT predicted a month ago to nearly 49 MMT. Exports in 2015/16 will fall back a touch to 48.3 MMT as Brazil re-claims the yellow jersey with foreign sales of 49.75 MMT. US new crop ending stocks of 500 million bushels were well above the average trade estimate of 443 million, and that seemed to be the headline grabbing number. 2014/15 US carryout was lowered by 20 million bushels to 350 million versus the average trade estimate of 362 million. World old crop ending stocks were revised lower by 4.0 MMT to 85.54 MMT versus the average trade guess of 90 MMT, although these are seen rising to 96.22 MMT in 2015/16. China's import needs in 2015/16 were called at a record 77.1 MMT versus 73.85 MMT in the current marketing year. Separately, Conab raised their forecast for the Brazilian 2014/15 soybean crop from 94.28 MMT to 95.07 MMT. China’s soybean imports will jump more than 50% from the previous quarter to 21.4 MMT in May-July, Oil World predicted. May 15 Soybeans closed at $9.67, down 16 cents; Jul 15 Soybeans closed at $9.55 1/2, down 18 1/2 cents; May 15 Soybean Meal closed at $302.50, down $9.60; May 15 Soybean Oil closed at 32.81, down 23 points.

Corn: The corn market closed narrowly mixed. The USDA raised their estimate for old crop ending stocks by 24 million bushels to 1.851 billion versus trade estimates of an average 1.864 billion. Their estimate for new crop production was 13.63 billion bushels with ending stocks coming in at 1.746 billion. Pre-report estimates had new crop production at 13.58 billion bushels, and carryout at 1.752 billion bushels, so there was nothing too startling there. The global 2014/15 ending stocks number was pegged at 192.50 MMT versus an average trade guess of 190 MMT. New crop ending stocks will fall a little to just under 192 MMT, the USDA said. They increased their forecast for Brazil's 2014/15 corn crop by 3 MMT from a month ago to 78 MMT due to record production potential from safrinha corn, which is now expected to account for more than 60% of the nation's output. "Brazil’s second-season corn yield is forecast at a record 5.44 tons per hectare. Precipitation has been above average in the main producing states of Mato Grosso, Goias, Mato Grosso do Sul and Parana. The precipitation and cool night-time temperatures benefitted corn as it advanced through flowering and early grain-fill stages," they said. Argentina's 2014/15 corn crop was raised by 0.5 MMT to 24.5 MMT, and production will rise again to 25 MMT in 2015/16, they forecast. China's 2015/16 corn crop was estimated at a new record 228 MMT, which is 8 MMT above their projected consumption levels next season. China's new crop import needs were pegged at 3 MMT, the same as this season. Tonight's price action means that the new crop soybean:corn price ratio has retreated from yesterday's 7-month high 2.53:1 to 2.48:1 at the close. In other news, Russia said that it's corn exports so far this season were down 31.9% on a year ago at 2.44 MMT. South Korea bought 63 TMT of optional origin corn in a tender, and Taiwan bought 130 TMT of US/Brazilian/Argentine corn. May 15 Corn closed at $3.57, down 1 1/4 cents; Jul 15 Corn closed at $3.61, up 1/2 cent.

Wheat: The wheat market closed narrowly mixed. US wheat exports in the current season were trimmed back from the 24 MMT predicted a month ago to 23.2 MMT. Yesterday's weekly export inspections report had these at 21.45 MMT so far this season (to May 7), with just three weeks now left to hit this new target. "Global wheat production is forecast down from last year’s record, but still above consumption for the third straight year. Global consumption is projected up slightly as steady growth in food use more than offsets lower feeding. Global trade is forecast lower, partly driven by larger crops in some major importing countries. US exports are projected higher, but the EU is forecast to be the world’s largest exporter for the third straight year," they said. US exports were forecast to recover to 25.5 MMT next season, although that's still significantly lower than the EU's 32.5 MMT. Canada's 2015/16 wheat exports will drop 3 MMT to 21 MMT, Russia's will decline 1.5 MMT to 20 MMT and Ukraine's are seen falling 1 MMT to 10.5 MMT. Imports will fall significantly in Iran (down 1 MMT to 5.5 MMT), Europe (down 0.8 MMT to 5.0 MMT), Morocco (down 1.4 MMT to 2.0 MMT), Thailand (down 0.5 MMT to 2.2 MMT) and Turkey (down 2.3 MMT to 3.5 MMT), they estimate. As far as production goes, decent rises are on the cards for Australia (up 2 MMT to 26 MMT), China (up nearly 4 MMT to 130 MMT), Iran (up 1 MMT to 14 MMT), Morocco (up 2.7 MMT to 7.8 MMT), Turkey (up 3.25 MMT to 18.25 MMT) and the US (up 1.7 MMT to 56.8 MMT). Output in Europe will fall by more than 6 MMT, with India's crop down nearly 6 MMT, Russia's down 5.5 MMT and Ukraine's dropping by 2.75 MMT. In other news, Algeria was said to have bought 200 TMT of durum wheat of Canadian/Mexican origin. The Canadian spring wheat crop is said to be 45% sown. The total planted area for that is seen rising 3.4% to 18 million acres this year, with the all wheat area up by 3.9% to 24.8 million acres. Russia said that it's wheat exports since the duty came in (Feb 1 to May 6) were down 60% year on year at 1.539 MMT. Season to date exports are still up 16.9% at 20.01 MMT though. May 15 CBOT Wheat closed at $4.79 1/4, up 3 cents; May 15 KCBT Wheat closed at $5.08 1/4, down 1 1/4 cents; May 15 MGEX Wheat closed at $5.26 3/4, down 1 3/4 cents.