Nogger's Blog

10/06/15 -- Soycomplex: Beans closed reluctantly a little lower, dragged down by falling wheat and corn, following the release of the June WASDE report from the USDA. In that they raised Argentina's 2014/15 soybean crop by 1 MMT from a month ago to 59.5 MMT, a bit more than the average trade estimate of 59.18 MMT. They left Brazil unchanged at 94.5 MMT though compared to the average trade estimate of a rise to 94.76 MMT. They showed US old crop soybean ending stocks tightening to 330 million bushels, down from 350 million in the previous report and a bit below the 339 million average trade guess. New crop ending stocks were pegged at 475 million bushels, down 25 million from last month and again a little bit under the average market idea of 487 million. They went unchanged on US soybean production this year at 104.78 MMT, still a modest 3% decline on last year's record crop. Brazil and Argentina were unchanged for 2015/16 at 97 MMT and 57 MMT respectively. Both their exports were also unchanged, along with Chinese imports of a record 77.5 MMT in the season ahead. Global 2015/16 ending stocks were reduced 3 MMT to 93.2 MMT, although that's still almost 10 MMT more than in the current season. In other news, Safras e Mercado estimated Brazil’s 2015/16 soybean crop at a new record 98.6 MMT. Dr Cordonnier estimated the Brazilian 2014/15 bean crop at 94.5 MMT, and Argentina's at 60 MMT, both unchanged from his previous estimates. Conab are due out tomorrow with their Brazilian crop estimates. Chinese industry analysts estimated the country's June soybean imports at a large 8.596 MMT. Trade ideas for tomorrow's weekly export sales report are 100,000–200,000 MT for old crop beans and 350,000-400,000 MT on the new crop. Jul 15 Soybeans closed at $9.49 1/2, down 2 cents; Nov 15 Soybeans closed at $9.21 3/4, down 3 1/4 cents; Jul 15 Soybean Meal closed at $314.40, down $2.10; Jul 15 Soybean Oil closed at 33.87, down 6 points.

Corn: The corn market closed around 7-8 cents lower. "The WASDE didn’t offer much support to corn with the surprise being the increase in global ending stocks. The USDA added 4.51 MMT to the 2014/15 global ending stocks number citing better production in South America. They added 3 MMT to the Brazilian crop and 0.5 MMT to the Argentinian crop," said Benson Quinn. That took world ending stocks for the current season up to 197 MMT versus an average trade guess that was little changed from a month ago at 192.52 MMT. It was also above the highest estimate in the range of trade guesses. Brazil's 2014/15 corn crop is now seen at 81 MMT versus an average trade estimate of 78.70 MMT. As far as the 2015/16 season goes, the only major change was adding 1 MMT to Russia's production potential, taking that up to 13 MMT. US output this year was forecast unchanged from last month at 346.22 MMT, a 4% decline on last year's record. The USDA put its US old crop corn ending stocks at 1.876 billion bushels, up 25 million from the May report, and a bit higher than the average trade guess of 1.859 billion. World 2015/16 ending stocks were pegged at 195.19 MMT compared to an average trade guess of 191.90 MMT. In other news, Dr Cordonnier estimated 2015 US corn yields at 167.0 bu/acre, unchanged from his previous estimate. He forecast the Brazilian 2014/15 corn crop at 79 MMT and estimated Argentina's at 24.5 MMT, both also unchanged from previously. Ukraine said that they'd exported 32.72 MMT of grains so far this season, including 17.44 MMT of corn. The Ukraine Ag Ministry estimated full season grain exports at 36.8 MMT versus 32.4 MMT in 2013/14. Chinese analysts said that their corn stocks could exceed 100 MMT at the end of this season (record levels) The Chinese government are to attempt to auction off 5 MMT of corn reserves over the next couple of days. The Taiwan Sugar Corp bought 23,000 MT of US corn for October shipment . Russia said that their 2015 corn crop was now 95.9% planted on 2.7 million ha, up 0.2 million on this time last year. The US Energy Dept put US ethanol production in the past week at a record 992,000 barrels/day. Jul 15 Corn closed at $3.57 1/4, down 7 3/4 cents; Dec 15 Corn closed at $3.75 1/4, down 7 3/4 cents.

Wheat: The wheat market closed around 12-18 cents lower. "The picture in wheat looks pretty bleak and today’s report didn’t offer any new inspiration for the length. Supplies are expected to remain ample and the USDA increased potential domestic and global production despite various hints that production in India and/or Australia could be lowered. There may be a point to address the dryness issues in Canada as well," said Benson Quinn. World 2015/16 wheat production was raised 2.62 MMT to 721.55 MMT. Russia's crop this year was increased by 1.5 MMT to 55 MMT, and Ukraine was upped 1 MMT to 23 MMT. US all wheat production was pegged at 2.121 billion bushels versus and average trade guess of 2.110 billion. World ending stocks for 2015/16 were lowered almost 1 MMT from a month ago to a still more than ample 202.4 MMT - and the highest since 2001/02. US new crop ending stocks were increased to 22.16 MMT, up more than 14% compared to the previous season and the most since 2010/11. In other news, ABARES estimated the 2015/16 Australian wheat crop at 23.6 MMT, down from 24.4 MMT previously, and fractionally below last year's 23.67 MMT. The USDA were at 26 MMT today. ABARES estimated the Australian barley crop at 8.25 MMT versus 8.01 MMT a year ago. Russia bought more than 45 TMT of grain at intervention today, taking the total bought so far to 1.08 MMT. The head of the Russian Grain Union estimated wheat exports there to be around 5 MMT below their potential in 2015/16 due to the new government export tax, placing these at 17-18 MMT. The USDA today increased their estimate by 1 MMT to 21 MMT. Taiwan are tendering for 97,420 MT of US wheat for Aug-Sep shipment. Japan are expected to buy 118 TMT of US, Canadian and Australian wheat tomorrow. Israel was said to have bought optional origin feed wheat and optional origin corn for Jul–Sep shipment. Kazakhstan said that their spring grain planting was 98.6% complete on 14.41 million ha. They estimate the final planted area at 15.2 million ha, of which 12.2 million will be wheat. "Besides the negative fundamental picture, the issue in wheat is the likelihood that the funds have pared their net short positions to manageable levels," suggested Benson Quinn. Jul 15 CBOT Wheat closed at $5.13 1/2, down 18 3/4 cents; Jul 15 KCBT Wheat closed at $5.30 1/2, down 17 3/4 cents; Jul 15 MGEX Wheat closed at $5.67, down 15 3/4 cents.