Nogger's Blog

28/05/15 -- Soycomplex: Beans closed lower, with the larger losses coming in the new crop positions. "If today’s trade is any indication of what to expect moving forward it’s going to be an uphill battle to build on any flat price rallies. Another fresh contract low was put in on the day," said Benson Quinn. The IGC released their first world soybean production estimates for 2015/16, putting the global crop at 316 MMT, a 4 MMT decline on this season's record. They have production in the US at 104.8 MMT this year (3.85 billion bushels), with Brazil chipping in with a new record crop of 97.5 MMT and Argentina producing 57 MMT. Chinese imports in 2015/16 were pegged at a new record 78 MMT. Much larger carry-in from 2014/15 than the previous year means that "with the anticipated increase in total supplies set to exceed that of uptake, world carryovers are seen rising by 9% year-on-year, to a peak of 52 MMT, including an increase of more than one-fifth in the major exporters," they said. In contrast "reflecting expectations for a smaller out-turn and tighter supplies, 2015/16 world rapeseed/canola carryovers are anticipated to fall by 26% year-on-year," they added. MDA CropCast estimated the US soybean crop at 3.823 billion bushels, down 3.6% from last year's record. They see 2015/16 production in Brazil even higher than the IGC at a new record 98.3 MMT, and agree at 57 MMT on Argentina. The Argentine Ag Ministry said that farmer selling on their 2014/15 soybean crop is at 37% versus 33% a year ago. The Buenos Aires Grain Exchange said that rain had stalled the Argentine harvest, which advanced by less than 3 percentage points on the week to 90.3% complete, although that's still 16.5 points ahead of a year ago at this time. Yields continue to exceed expectations, meaning that final production could top their current harvest estimate of a record 60 MMT, they said. A Bloomberg survey of traders and analysts found only 2 that were bullish on soybean price prospects (the same as a week ago), 20 were bearish and 3 neutral. Trade estimates for tomorrow's weekly export sales report for beans are around 350-650 TMT combined over both crop years. Jul 15 Soybeans closed at $9.26, down 1 cent; Nov 15 Soybeans closed at $9.02, down 4 1/2 cents; Jul 15 Soybean Meal closed at $304.80, down $3.30; Jul 15 Soybean Oil closed at 32.06, up 33 points.

Corn: The corn market closed around 3-4 cents higher, consolidating some of the recent losses. Weekly ethanol production was pegged at 969,000 barrels/day, up from 958,000 bpd last week. This would appear to confirm that corn prices have got themselves low enough so that some idled plants have been brought back into production. There may well have been an element of book-squaring and profit-taking on shorts as we approach month-end too today. The IGC added 10 MMT to their global 2015/16 corn production estimate, which was hardly bullish. At 961 MMT, it is still 3.6% below last year's record though. Some 3 MMT of that increase came from Brazil, who's next crop was now put at 78 MMT, only a fraction below 78.6 MMT this season. China's crop was increased by 1 MMT to 220 MMT and that in the US also by 1 MMT to 332 MMT. Ukraine's 2015 corn crop was seen unchanged at 24.9 MMT, and production in the EU was pared back to 67.2 MMT. They raised global corn consumption by 5 MMT and added 6 MMT to world carryout, taking that up to 187 MMT. MDA CropCast estimated the world corn crop in 2015/16 slightly lower than the IGC at 959.9 MMT, unchanged on a week ago. They have production in the US this year at 13.802 billion bushels versus the record 14.367 billion produced last year. Ukraine's crop was forecast at 26.2 MMT and the EU's at only 62 MMT. Russia said that their 2015 corn crop was now 91% planted on 2.6 million ha. Ukraine's is now said to be just about all in on 4.2 million ha. The Argentine Ag Ministry said that farmer selling on their 2014/15 corn crop is at 47% versus 37% a year ago. The Buenos Aires Grain Exchange said that the 2014/15 corn harvest there only advanced 1.9 percentage points for the week to 37.4% complete due to rain. That's 1.6 percentage points ahead of this time a year ago. They left their production estimate unchanged at 25 MMT. A Bloomberg survey of traders and analysts found 4 that were bullish on corn's price prospects (down from 9 a week ago), 10 were bearish and 11 neutral. Tonight's closing new crop soybean:corn price ratio is just under 2.44:1, down from 2.47:1 last night, but up from 2.40:1 only last Friday. Trade estimates for tomorrow's one day delayed weekly export sales from the USDA are around 650 TMT to 1.1 MMT for both crop years combined. Jul 15 Corn closed at $3.53 1/2, up 4 cents; Dec 15 Corn closed at $3.70, up 3 1/4 cents.

Wheat: The wheat market closed narrowly mixed across the three exchanges. Similar to corn, the IGC added 10 MMT to their 2015/16 global production estimate, pegging the world wheat crop in the year ahead at 715 MMT. Consumption was raised by 4 MMT, taking ending stocks 6 MMT higher to 200 MMT. Production increases in 2015/16 came from the EU, up 1.8 MMT to 150 MMT, China (up 9 MMT to 127 MMT), Russia (up 3 MMT to 55 MMT) and Ukraine (up 1 MMT to 21 MMT). There were output reductions for India (down 3 MMT to 91 MMT), the US (down 0.8 MMT to 58.2 MMT) and Kazakhstan (down 0.6 MMT to 13.5 MMT). MDA CropCast estimated the global wheat crop at 711.6 MMT, down 0.66 MMT on last week. They see the 2015/16 US all wheat crop at 2.216 billion bushels, with Ukraine at 21.9 MMT and Russia at 52.8 MMT. Opinions over the production prospects of the latter in particular still vary quite widely. The Russian Grain Union are at 55 MMT, SovEcon are at 54 MMT and the USDA on 53.5 MMT. The Russian Ag Ministry don't breakdown their forecasts by grain, simply forecasting a total grain crop of 100 MMT, although the new Ag Minister is saying that output could match last year's 105.3 MMT. That would imply a Russian wheat crop of around 58-59 MMT this year. Only the government seem to think that this is the case though. They say that spring wheat plantings are past 70% done on 9.3 million ha. Ukraine say that 7.6% of their winter grains are in excellent condition and a further near 75% in good condition. The Argentine Ag Ministry said that farmer selling on their 2014/15 wheat crop is at 76% versus 53% a year ago. Argentine farmers have just about got going planting their 2015/16 wheat crop. That progress is being delayed by rain, and is only 4.3% done, up 1.5 percentage points on the week and versus 6.4% complete a year ago. The Buenos Aires Grain Exchange see plantings at 4.1 million ha. Local analysts Agritrend say that plantings could fall to only 3.7-3.9 million ha due to low prices, the lack of cash and the ever-present possibility of export quota restrictions. Egypt's GASC bought 3 cargoes of Russian and one Romanian wheat for early July at prices below $200/tonne including freight. US wheat was priced well out. Tomorrow's weekly export sales total is estimate at around 200-500 TMT.  Bloomberg's survey found 8 traders bullish on wheat, 9 bearish and 8 neutral. Jul 15 CBOT Wheat closed at $4.88 3/4, up 1 cent; Jul 15 KCBT Wheat closed at $5.10 1/4, down 1 3/4 cents; Jul 15 MGEX Wheat closed at $5.47, up 1 1/4 cents.