Nogger's Blog

26/06/15 -- Soycomplex: Beans closed higher, but were a follower rather than a leader today. Continued wetness means that "the market isn’t expecting much progress over last week concerning planted acres," according to Benson Quinn concerning Monday's crop progress report from the USDA. As of last Sunday night around 8.5 million acres of US soybeans still had to be planted. Last week's figure of 90% sown may have advanced to perhaps 93-94% done it is thought. Once Monday's report is out of the way, we only have one more sleep until we get the USDA's key acreage and quarterly stocks reports due out on Tuesday. A Bloomberg survey pegs US 2015 soybean plantings at an average 85.332 million acres versus the USDA's March figure of 84.635 million. The range of guesses is 83.76-86.80 million and plantings in 2014 were 83.701 million. As of last Sunday only around 76.2 million acres of soybeans were in the ground, and in some cases they were under water. For June 1 US stocks the average estimate is 679 million bushels, from within a range of estimates of 604-773 million and versus 405 million a year ago. The Buenos Aires Grain Exchange said the Argentine 2015 soybean harvest is now 99.6% done, bringing in 60.7 MMT of an estimated record 60.8 MMT crop this year. The weekly Commitment of Traders report shows managed money flipping from a net short of around 63,500 lots to a near 2,000 contract long position for the week through to Tuesday night. "Plenty of shorts are caught on the wrong side in addition to the funds attempting the exit positions," suggested Benson Quinn. That could bring further choppy trade next week in the run-up to these important USDA announcements. In China, the Shanghai Composite closed almost 7.5% lower on Friday "as investors began to show concern about another wave of new listings absorbing liquidity in the market," reported the BBC. In Brazil's state of Mato Grosso, the planting of safrinha soybeans will be prohibited starting with the 2015/16 growing season, and the state of Parana may end up going the same way, says Dr Cordonnier. Mato Grosso has a compulsory 138 day soybean-free period starting on May 1st and ending on September 15th. Parana currently only has a 92-day ban on growing soybeans. Jul 15 Soybeans closed at $10.02, up 1 3/4 cents; Nov 15 Soybeans closed at $9.86, up 8 1/4 cents; Jul 15 Soybean Meal closed at $341.30, up $4.60; Jul 15 Soybean Oil closed at 33.22, down 14 points. For the week that puts Jul 15 beans 30 1/2 cents higher, with Nov 15 up 46 1/4 cents, Jul 15 meal up $18.20 and Jul 15 oil adding 67 points.

Corn: The corn market closed around 8-10 cents higher. Midwest wetness supports the market, which advanced more than 30 cents during the course of the week. A Bloomberg survey estimates 2015 US corn plantings in next Tuesday's USDA report at 89.136 million acres, from within a range of guesses of 88.10-91.742 million, little changed versus the March USDA figure of 89.199 million and down 1.6% from last year's 90.597 million. June 1 US stocks are pegged at 4.557 billion bushels. The range of estimates is 4.35-4.70 billion and a year ago stocks were 3.852 billion. Before we get the new USDA numbers, the trade will be looking at crop conditions in Monday's USDA crop progress report. Ohio good to excellent fell 19 percentage points last week alone, with Indiana down 15%, North Caroline down 11% and Illinois corn falling 6% on the top two categories. The weekly Commitment of Traders report showed that managed money accounts had decreased their net short position by 25,649 contracts for the week through to Tuesday night, but they are still short around 95,000 lots. Those shorts will be feeling a little nervous ahead of the release of next week's USDA numbers. Meanwhile the Midwest is not the only area in the world experiencing excessively wet conditions, say Martell Crop Projections. "China’s top corn province Heilongjiang also is too wet with 150-200% of normal rainfall in recent weeks. Heavy rain that began in mid May has intensified in June, adding up to 200 mm (8 inches) in western Heilongjiang. The eastern province received 165 mm of rainfall. These rainfall amounts are way above average, hampering corn planting efforts. Heilongjiang is the largest corn province in China making up 18-20% of national corn output. A delayed start to the corn spring planting season in Northeast China may lead to trouble, limiting heat units for corn growth and development. The growing season is relatively short due the northern latitude," they say. The Buenos Aires Grain Exchange said that the Argentine corn harvest is 49.1% complete on 1.6 million ha, producing a crop of 13.87 MMT so far, and stood by their estimate for full season output of 25 MMT this year. FranceAgri Mer cut French corn crop ratings by 2 points to 83% good to very good. Coceral estimate this year's EU-28 corn crop down 11% to 65.74 MMT. Output in France, the largest producer in Europe, will fall 9% to 14.89 MMT, they said. Temperatures may near 100F (38C) in corn areas in southern France in the second half of next week, a senior meteorologist at AccuWeather told Bloomberg. Jul 15 Corn closed at $3.85, up 8 1/2 cents; Dec 15 Corn closed at $4.02, up 9 3/4 cents. For the week, Jul 15 corn was up 31 3/4 cents, and Dec 15 added 33 1/4 cents.

Wheat: The wheat market closed with strong gains on the day, and for the week. "We’ve seen a period of generally favorable weather for wheat production around the world, outside of the Plains drought. However, that pattern appears to be over, with talk of heat and dryness in Europe, Russia, Canada and expectations that El Nino will lead it to be a problem in the Australian spring," said Arlan Suderman of Water Street Solutions. That Plains drought has given way to excessive rains, hampering winter wheat harvesting in the US and potentially causing problems for some spring wheat areas later in the season too. As often happens, the hot and dry weather on the US Plains earlier in the season, seems to mean that protein levels are high this year though, even if bushel weights are lower than had been hoped for in what has been harvested so far. French winter wheat conditions are in decline, cut by 4 points in the good to very good category by FranceAgriMer today, having been dropped 2 points the previous week. Conditions are however still better than they were this time a year ago, but the concern now is that further serious heat due next week could cause more damage. Spain's Cooperativas Agro-Alimentarias meanwhile slashed their crop production estimates for wheat and barley compared to what they were hoping to achieve only a month ago. They now have the Spanish wheat crop estimated down 14% year-on-year at 4.92 MMT, well below the 7.53 MMT that they were predicting in May.  The Buenos Aires Grain Exchange were unchanged on their estimate for Argentine winter wheat plantings at 3.9 million ha. Coceral today estimated the EU-28 soft wheat crop down 5.2% on last year at 140.62 MMT, with all wheat production down 4.9% at 148.22 MMT. The EU-28 barley crop was pegged down 5.8% at 56.68 MMT. A Bloomberg survey estimated US all wheat plantings for Tuesday at 55.707 million acres, from within a range of guesses of 55.10-56.80 million and versus 56.822 million a year ago and the USDA's March forecast of 55.367 million. US June 1 wheat stocks were seen at 712 million bushels, with a range of estimates of 650-765 million and versus last year's 590 million. "The situation for Western Canadian wheat production is dire as temps will be well above normal through much of next week," said Benson Quinn. Rabobank said that they see the potential for “considerable price volatility” related to El Nino in global wheat prices in August and September when Australian yields are determined on east coast. Jul 15 CBOT Wheat closed at $5.62 1/4, up 30 1/4 cents; Jul 15 KCBT Wheat closed at $5.59 1/4, up 24 cents; Jul 15 MGEX Wheat closed at $5.95 3/4, up 21 1/4 cents. For the week, that puts Chicago wheat up 73 3/4 cents, with the Kansas market adding 56 cents and Minneapolis gaining 52 3/4 cents.