Nogger's Blog

05/06/15 -- Soycomplex: Beans closed lower on the day, but still slightly higher for the week. The Buenos Aires Grain Exchange reported the Argentine soybean harvest is wrapping up at 93.4% complete. Average yields are above expectations they say, and thus they raised their production estimate again to a new record 60.8 MMT versus 60 MMT previously. Ukraine's Ag Ministry estimated their 2015 soybean crop at a record 4.2 MMT, due to increased plantings which are seen up 9.4% this year to almost 2 million ha. They said that output there could reach 6 MMT on plantings of 2.5 million ha by the end of the decade. Canadian canola traded above CAD500/tonne for the first time since September 2013 following recent widespread reports of crop damage caused by last weekend's heavy frost. Growers there could still replant, although yields would be negatively impacted, and trade talk suggests that seed is now in short supply. The Government of Saskatchewan yesterday said that 22% of the crop there was in poor to very poor condition. A year ago that figure was only 1%. Canola rated good to excellent in the state was 44% versus 87% this time last year. The final planted Canadian canola area could hit a 5-year low 18 million acres this year it is being suggested. The weather outlook for the Canadian Prairies remains dry. El Nino typically causes dryness in the Western Prairies, Alberta and much of Saskatchewan, although Manitoba may fare better. These are exactly conditions that prevailed in May, say Martell Crop Projections. The USDA will update us on Monday how US soybean plantings are going, they were 71% complete as of last Sunday night, so we might be looking at a figure of around 80% done this time round. They are also likely to give us their first soybean crop condition ratings, with a fairly high good to excellent score expected. The weekly Commitment of Traders report shows fund money reducing the size of their overall net short position in soybeans by more than 9,000 contracts on the week through to Tuesday night. Jul 15 Soybeans closed at $9.37 3/4, down 8 3/4 cents; Nov 15 Soybeans closed at $9.14 1/4, down 9 3/4 cents; Jul 15 Soybean Meal closed at $304.90, down $0.80; Jul 15 Soybean Oil closed at 34.78, up 25 points. For the week that puts front month beans 3 3/4 cents higher, with meal down 80 cents and oil the big gainer - up 145 points.

Corn: The corn market closed lower on the day, but higher for the week, just like soybeans. A sharp rally by the US dollar was a negative factor today. "Domestic weather forecasts continue to look beneficial to the crop with limited areas of concern. Drought monitors improved over the week," noted Benson Quinn. "The US Climate Prediction Centre increased the risk factor for El Nino, and are now predicting a 90% chance of an occurrence," said Martell Crop Projections. There appears to be strong evidence that an El Nino is in fact already in place, so what does that mean for US corn? "There is no clear evidence that El Nino has much of an impact on corn yields. Out of 7 occurrences of summer El Nino, back to 1965, three corn harvests made a very productive yield (1972, 1987 and 2009), one made an average yield (1965) and the remaining three finished with a below average yield (1991, 1997 and 2002). Spring rainfall in the corn belt has been mostly favourable so far with ample, but not excessive, rainfall. No meaningful flooding has occurred. Corn development is on schedule, even ahead of the average pace, in several corn states. Overall conditions are promising at 74% good-excellent, 23% fair and only 3% poor-very poor," they added. The USDA will update us on those conditions on Monday, with little change expected. They will also report on corn planting progress, which was at 95% done last week. Benson Quinn think that this might now be reported at 97% done, giving rise to some talk of corn going unplanted in some of the wetter states. Colorado, Kansas, Missouri and Texas had the most left to plant last week. Elsewhere, the Buenos Aires Grain Exchange said that corn harvesting in Argentina was 39.4% done, and held steady with their production estimate at 25 MMT. FranceAgriMer said that corn planting there was finished and that the crop was 98% emerged versus 95% last week and 97% last year. They cut the proportion of the crop rated good to very good from 88% to 86%, which is now 2 points lower than a year ago. Brussels issued 292 TMT worth of EU corn import licences this past week, taking the total volume approved so far to 8.7 MMT, down 36% year-on-year. Russia said that their corn crop was 95.2% planted on 2.7 million ha. Fund money cut their net short position in corn by around 5,600 contracts for the week through to Tuesday night. They are still short nearly 135k lots though. Jul 15 Corn closed at $3.60 1/2, down 3 cents; Dec 15 Corn closed at $3.78, down 3 cents. Jul 15 was up 9 cents for the week.

Wheat: The wheat market closed lower on the day, but with some fairly decent gains for the week. Dryness in Canada remains a concern, with the Government of Saskatchewan yesterday rating spring wheat crops there at 65% good to excellent versus 90% this time last year. Poor to very poor ratings were 6% versus only 1% a year ago. "Multiple weather disturbances through western Canada are not expected to significantly improve soil moisture in the driest regions, but there may be some benefit," said Benson Quinn. Unusually hot temperatures are being experienced in many parts of Europe, the Black Sea and Russia. The forecast offers more of the same. FranceAgriMer trimmed their good to very good crop ratings for winter wheat and winter and spring barley today. In the very good category, winter wheat was pegged 3 points lower on the week to 33%, winter barley was down 5 points to 29% and spring barley fell 6 points to 20%. The Russian government said that they won't change the new Jul 1 wheat export tax formula, despite industry requests to do so. They did say though that they may review the duty at some point in the future if it seems that the new system isn't working correctly. The Buenos Aires Grain Exchange said that Argentine winter wheat planting was 9.8% complete, up 5.4 percentage points in a week, helped by beneficial weather. They were unchanged on their 2015/16 wheat area estimate at 4.1 million ha. Egypt said that they might end up procuring 5.3 MMT of wheat on the domestic market this year, which is substantially more than the 3.7 MMT that they original estimated that they would buy. That would leave them potentially requiring fewer wheat imports. Kazakhstan said that drier weather had enabled growers there to make some catch up progress with spring plantings, which are now seen at 84% done on 12.35 million ha, although that still lags 97.5% complete on 14.34 million ha this time last year. This afternoon's Commitment of Traders report shows fund money trimming back their short position in CBOT wheat by more than 11,600 contracts, although they still hold a sizeable short. Russia said that their spring wheat crop was 96.8% planted on 12.8 million ha - exactly the same area that had been sown this time last year. How very convenient and coincidental that is! Ethiopia tendered to buy 400,000 MT of optional origin milling wheat for Jul/Sep shipment. Jul 15 CBOT Wheat closed at $5.17, down 6 3/4 cents; Jul 15 KCBT Wheat closed at $5.35 1/4, down 6 cents; Jul 15 MGEX Wheat closed at $5.71 1/2, down 4 1/4 cents. For the week that puts Chicago wheat 40 cents higher, with Kansas up 36 1/2 cents an Minneapolis gaining 40 3/4 cents.