Nogger's Blog

29/07/15 -- Soycomplex: Beans closed mixed, higher on the nears and lower on new crop. After a 10% fall over the last 2 days the Shanghai Composite Index was up 3.4% today. Argentina's Ag Ministry said that the country had crushed a record 18.5 MMT of soybeans in the first half of 2015. They also said that Argentine growers are 59.5% sold on their 2014/15 soybean crop versus 49.2% committed this time a year ago. South Korea tendered for 60,000 MT of US/South American soy meal for November delivery. The GFS weather model is giving wetter than normal for the western corn belt, and generally drier than normal in the eastern half for the period through to Aug 13. Temperatures are forecast to be normal to cooler than normal everywhere but the southeast of the US. Cool August temperatures would normally be regarded as beneficial for crops, particularly beans as August is regarded as the critical yield determining month. New crop beans and meal should get a demand boost from a much tighter global rapeseed S&D situation in 2015/16. The Canadian Ag Ministry forecast a 2015 canola crop there of 14.3 MMT, down 1.7 MMT on their previous forecast and 1.3 MMT less than last year. They trimmed 0.8 MMT off their 2015/16 Canadian canola export forecast, taking that down to 7.6 MMT, which would be 1.6 MMT below 2014/15. Trade estimates for tomorrow's weekly export sales report are between 500 TMT to 1 MMT for both marketing years combined. Aug 15 Soybeans closed at $9.83, up 8 1/4 cents; Nov 15 Soybeans closed at $9.43 1/4, down 1 1/2 cents; Aug 15 Soybean Meal closed at $350.00, up $4.80; Aug 15 Soybean Oil closed at 30.21, down 45 points.

Corn: The corn market closed around 7 cents lower. The US Energy Dept had weekly US ethanol production down 8,000 barrels per day from the previous week to 965,000 bpd. The Argentine Ag Ministry said that growers there are 62.4% sold on their 2014/15 corn crop versus 53.5% committed this time a year ago. As well as being wetter than normal. July temperatures in the Midwest have also largely been cooler than average for the month. "The time worn adage is that 'rain makes grain' boosting corn yields in the critical July pollination period. However, the 2014 summer growing season proved that coolness may be more influential for corn for boosting yields. Midwest temperatures in July 2014 were 4 F below average, leading ultimately to a record harvest. The national average corn yield finished with 171 bushels per acre, 7% above trend. This was a surprising result, since rainfall was below average during the critical July pollination stage," said Martell Crop Projections. "A record corn yield was achieved in 2009 also, 9% above trend, bolstered by record cool July temperatures. Another “super cool” July in 1992 promoted favourable corn yields also 8.3% above trend (average). July coolness has been proven to be beneficial for corn yields, as the cooler temperatures reduce evaporation from the soil surface. This helps to conserve ground moisture in corn during the critical pollination stage," they add. Could this ultimately also prove to be true in 2015? The market seems to think that it might. Trade estimates for tomorrow's weekly export sales report are around 500-800 TMT. Sep 15 Corn closed at $3.67 3/4, down 7 1/4 cents; Dec 15 Corn closed at $3.78 1/4, down 7 1/4 cents.

Wheat: The wheat market closed lower across the board. The Wheat Quality Council's spring wheat crop tour is underway, and said to be reporting some of the best potential wheat yields in years. The official tour estimate is expected to be out on Thursday. The day one yield of 51.1 bushels/acre, was up from the 2014 figure of 48.3 bu/acre, and the five year average of 43.4 bu/acre. It was also the highest in a tour history going back to 1994. This comes at a time when demand for US wheat is already slack, and right in the middle of the wheat harvest in the Black Sea region. Ukraine said that it had harvested 18.3 MMT of wheat so far and that yields were a bit better than last year. Russia said that it had harvested 27.7 MMT of wheat to date, and that its yields were also up a little compared to 12 months ago. The Argentine Ag Ministry said that growers there are 87.8% sold on their 2014/15 wheat crop versus 64.0% committed this time a year ago. Colombia are said to be in the market seeking wheat. Japan are tendering for 120,000 MT of feed wheat and 200,000 MT of feed barley for November shipment. Tunisia are looking for 134,000 MT of optional origin milling wheat. Morocco said that it had/would produce a record wheat harvest in 2015, and that it's import needs would therefore be reduced. Egypt’s Supply Minister said that the country has enough wheat stocks bought to last it for the next six months. These sort of statements are routine, and don't rule them out of tendering again in the market very soon, especially on this latest break in prices. Trade estimates for tomorrow's weekly export sales report are 350-600 TMT. A figure below this level would be another nail in the coffin for US wheat. Sep 15 CBOT Wheat closed at $4.96 1/4, down 14 1/2 cents; Sep 15 KCBT Wheat closed at $4.95 1/4, down 9 1/2 cents; Sep 15 MGEX Wheat closed at $5.29 1/2, down 10 3/4 cents.