Nogger's Blog

01/07/15 -- Soycomplex: Beans closed lower, giving up some, but not anything like all, of yesterday's gains. "Producer selling was noted overnight and early in the session, but slowed with the break in the prices," said Benson Quinn. Today's eventual price action looks like the market had time to step back, take a breather, and conclude that yesterday's steep rises were maybe a little overdone. It's unlikely that this volatility is over just yet however. It's July and we are in a weather market, pure and simple. "The new Midwest forecast is less wet than previously. Temperatures are trending much cooler. The 7 day outlook is for 3-5 F below normal temperatures in the western Corn Belt, 2-3 F below average in the eastern Midwest. Cooler temperatures would continue in the 6-10 day outlook, along with above average rainfall July 6-10," said Martell Crop Projections. Dr Cordonnier, touring Illinois, Iowa and Missouri said "The soybean crop is in trouble, big trouble! Of the soybeans we saw, I would estimate that 40% are good, 30% are mediocre, and 30% are poor to very poor. Where the crop is poor, it is really bad or in some cases nonexistent. In some of the saturated areas, half of the soybeans are missing and the other half is very short, stunted, poor colour, and really struggling. Combining the unplanted soybeans and the soybeans lost due to standing water, the total soybean acreage could be millions of acres short of what was intended. If the weather during July and August would turn out to be normal, that could stabilize the crop, but it would still be disappointing. If the weather over the next two weeks is as wet as it has been for the last several weeks, the soybean crop is going to get a lot worse." Trade estimates for tomorrow's weekly export sales report are around 200-500 TMT for beans and 100-300 TMT for meal. Jul 15 Soybeans closed at $10.44, down 12 1/4 cents; Nov 15 Soybeans closed at $10.29 1/2, down 7 3/4 cents; Jul 15 Soybean Meal closed at $359.80, up $0.30; Jul 15 Soybean Oil closed at 33.01, down 55 points.

Corn: The corn market closed narrowly mixed. Weekly ethanol production slowed to 968,000 barrels per day, down from 994,000 barrels per day the previous week. Dr Cordonnier reported that "the corn crop is highly variable depending on date of planting, rainfall, drainage, and location. The earliest planted corn is the best and the latest planted corn is the worst. A lot of corn is short, yellowish in color, very uneven in height and in development. Where the corn is good, it looks really good, but where it is bad, it looks really bad. Of the corn I saw, I would estimate that 60% is good or better, 20% is mediocre, and 20% is poor or very poor. The corn in Illinois was worse than I expected, the corn in Iowa was about as I expected, and the corn in Missouri was much worse than I expected. Missouri had the worst looking corn, Iowa had the best looking corn, and Illinois was a mixed bag. If the weather during July and August ended up being normal, the corn crop would end up being a disappointment, but not a disaster." It would seem that we are stuck with a fairly wide degree of uncertainty over potential US corn yields until we get much closer to harvest time. Fund money is probably still short on corn, but we won't find out how short they still are until Monday. The usual Commitment of Traders report is delayed until then due to the market being closed on Friday for the Independence Day holiday. The fact that prices have now risen well above the $4/bushel mark, to the best levels in a year, will doubtless have attracted some producer selling. A sharply higher US dollar again today would have been another bearish factor. So, all in all, a virtually unchanged close today was probably not a bad result. Trade estimates for tomorrow's weekly export sales report are in the 450-850 TMT region for both marketing years combined. Old crop sales might contribute around 300-500 TMT of that total. Jul 15 Corn closed at $4.13 3/4, down 1/4 cent; Dec 15 Corn closed at $4.31 3/4, up 1/4 cent.

Wheat: The wheat market closed with some fairly steep losses. Large US stocks, the strong dollar, and the continued difficulty to compete on the export front with EU and Black Sea origin wheat were the factors on traders' minds today, not continued wetness on the Plains. "Egypt released another snap tender to buy wheat for early August shipment after the close today. That could remind traders of the high price of US wheat relative to European and Black Sea supplies tomorrow and must be watched," noted Arlan Suderman of Water Street Solutions. He's right, you can expect US wheat to be comfortably outpriced there, if anyone bothers to offer any at all. Weekly export sales tomorrow will be of interest. Last week's sales of 434,300 MT actually managed to beat modest trade expectations for sales of only 200-400,000 MT. What will tomorrow's bring? The trade isn't getting it's hopes too high, estimating these at around 250,000 to 450,000 MT. Russia said that it had harvested 1.6 MMT of new crop grains off 423.4k ha, down compared to 953.6k ha this time a year ago. Wetness in some areas is now delaying the harvest, and that could mean that Jul/Aug exports might be a bit lower than previously expected, SovEcon told Bloomberg. High moisture levels may also damage grain quality, they said. Russia was forecast to have finished the 2014/15 season, which ended yesterday, exporting a record of around 31.7-31.9 MMT of grains, including around 21-22 MMT of wheat. Potential production problems in Europe and Canada (and possibly Australia too) keep getting flagged up. Bloomberg report that field fires in France have burnt some crops in recent days. Meanwhile, a senior economist with the Australia & New Zealand Banking Group said that continuing drought in Canada may create a 12 MMT shortfall in wheat exports in015/16. US winter wheat areas remain wet. Jul 15 CBOT Wheat closed at $5.87 1/2, down 27 1/4 cents; Jul 15 KCBT Wheat closed at $5.76, down 17 1/4 cents; Jul 15 MGEX Wheat closed at $6.07 1/2, down 14 3/4 cents.