Nogger's Blog

08/06/15 -- Soycomplex: Beans closed higher, aided by weekly export inspections of 216,590 MT, which were pretty decent given the time of year and the frenetic pace of early season shipments. Season to date shipments are now up almost 12% on year ago levels. The USDA currently predict US exports in 2014/15 to be 9.4% ahead of those in 2013/14, so they are ahead of schedule to meet that target. Chinese customs data shows that they imported 6.13 MMT of soybeans in May, up 2.7% versus a year ago and 15.4% higher than in April. June imports could be as high as 8.5 MMT some analysts are suggesting. Jan/May Chinese imports are still down 2.7% year-on-year at a little over 27 MMT however. Dr Cordonnier reports that a survey of growers in Brazil's Mato Grosso found that they only had 22% of their 2015/16 inputs (seeds, fertilisers, and chemicals) purchased at the end of April versus around 70% normally. Low grain/oilseed prices, high interest rates and a lack of credit are the problem, he says. Inflation and increased production costs are other factors inhibiting farmer's purchasing of inputs, he adds. After the close the USDA reported that soybean planting was 79% complete, up a relatively modest 8 points on the week, and now 2 points behind the 5-year average. Missouri is only 30% done versus 69% normally, and Kansas 31% sown compared to 76% on average. These are the two most notable laggards. Emergence is at 64% versus 63% on average. Crop conditions were placed at 69% good to excellent compared to 74% a year ago. Missouri and Kansas feature among the states with the worst conditions, along with Louisiana. The trade will now be looking to Wednesday's June WASDE report from the USDA to provide some direction. Average estimates for Argentine and Brazilian soybean production in that are 59.1 MMT and 94.8 MMT, respectively, say Benson Quinn. US 2014/15 ending stocks estimated at 340 million bushels versus 350 million in May, and 2015/16 US ending stocks are estimated at 487 million bushels versus 500 million in May, they add. Jul 15 Soybeans closed at $9.44 1/4, up 6 1/2 cents; Nov 15 Soybeans closed at $9.20 1/4, up 6 cents; Jul 15 Soybean Meal closed at $309.50, up $4.60; Jul 15 Soybean Oil closed at 34.10, down 68 points.

Corn: The corn market closed around 4-5 cents higher, aided by spillover support from wheat. Weekly export inspections were at the low end of trade estimates at 740,543 MT versus 984,275 MT the previous week. They were also below the 1,054,545 MT average needed to meet the current USDA estimate for the season, noted Benson Quinn. APK Inform said that Ukraine seaports shipped out 525 TMT of grains last week, of which 98% was corn. The Ukraine Ag Ministry said that corn planting there was just about done on 4.28 million ha, down from 4.8 million a year ago. Clashes between separatists and the Ukraine military have flared up again in recent days. Russia said that their 2014/15 corn exports stand at 2.8 MMT, a significant drop on 3.9 MMT this time last year. The USDA didn't report on corn planting in the US tonight, suggesting that pretty much what is going to get sown is already now in the ground. Emergence was placed at 91% versus 90% on average and this time last year. Good to excellent crop conditions were essentially unchanged at 74% good to excellent, although there was a one point increase in excellent and a one point decrease in good. As with last week, the states displaying the worst crop conditions are Kansas and Missouri at 13% and 12% poor to very poor respectively due to excessively wet field conditions. On the US weather front, the developing El Nino event seems to be pretty firmly entrenched looking at the weather forecast. "Strong Midwest showers are predicted this week, fuelled by a moist air stream known as the Southwest monsoon. A surge of tropical moisture from Mexico is directed northward by the jet stream, spreading across Arizona and New Mexico, bending northeastward into Kansas and Nebraska, then pushing due eastward across the Midwest corn belt. The Midwest forecast is very wet indeed. The heaviest rainfall would target Nebraska, western Iowa, southern Minnesota and central Wisconsin, where 4-5 inches of rain is expected. Note the average weekly rainfall is 0.80 inch for the second week in June. Less heavy but above normal rainfall is expected in the balance of the Midwest, 1.5-1.75 inches. Flooding in the Midwest would be especially threatening for small, recently planted corn and soybeans," said Martell Crop Projections. Jul 15 Corn closed at $3.65 1/4, up 4 3/4 cents; Dec 15 Corn closed at $3.83 1/2, up 5 1/2 cents.

Wheat: The wheat market closed with decent gains across the three exchanges. Weekly export inspections were no better than "routine" at 302,725 MT. The USDA had 161,004 MT of those as old crop. The USDA reported US winter wheat crop conditions fell one point in the good to excellent category this week to 43%. They said that harvesting of that was only 4% complete, half of what it was a year ago and only a third of the 5-year average. "Crop watchers are still assessing wheat conditions in the southern Great Plains, where widespread flooding developed in May. Some areas of Texas and southern Oklahoma received more than 17 inches of rainfall. Severely damaged wheat may not be suitable for harvesting, rather grazed out to cattle. Heavy rainfall is predicted this week posing a threat to winter wheat quality. The warm, wet environment in June is ideal for the development of disease," said Martell Crop Projections. The USDA tonight had US spring wheat was rated 69% good to excellent, down 2 points on a week ago. The USDA's FAS in India cut their estimate for this year's wheat crop there by 5 MMT to 87 MMT, a near 9 MMT decrease on a year ago due to late season heavy rain and hail. They peg consumption at almost 6 MMT more than that, although they don't expect a huge increase in India's wheat import needs in 2015/16 due to large carryover stocks from recent previous bumper harvests. The issue as to exactly what condition these carryover stocks from previous years are in is an interesting one. Given the lack of capacity in India for proper grain storage, much of these stocks will have been stored on bags out in the open, and subject to all sorts of damage from insects, rats etc. Indian millers are said to have been quite busy of late buying Australian wheat to blend in with this year's low quality crop. SovEcon raised their forecast for the Russian 2015 grain crop by 5 MMT to 99 MMT, an excellent result if it could be achieved given all the problems growers there have faced. Production was 105 MMT a year ago when autumn establishment was much better and the credit to purchase inputs was much more freely available. They raised the wheat production estimate by 4 MMT to 57 MMT, now only around 2 MMT below last year. Despite that, they estimated that new crop sales by exporters were down 25-30% on concerns that the new "floating" export duty on wheat, which is tied to the value of the rouble, could prove to be rather costly given the volatile nature of the Russian currency. Jul 15 CBOT Wheat closed at $5.28, up 11 cents; Jul 15 KCBT Wheat closed at $5.44 1/2, up 9 1/4 cents; Jul 15 MGEX Wheat closed at $5.80 1/2, up 9 cents.