Nogger's Blog

02/07/15 -- Soycomplex: Beans closed mixed in relatively subdued trade after the excitement seen earlier in the week. The market is closed for the Independence Day holiday tomorrow, so there were maybe a few traders absent already, or looking to get off early and make a nice long weekend of it. It could be an interesting one, depending on what the US weather does over the next three days and what happens in the Greek referendum. That could make for lively trade next week. Monday's crop condition ratings will make interesting reading, and due next Friday is the July WASDE report from the USDA. Weekly soybean export sales came in at net reductions of 10,300 MT for 2014/15, which included decreases for unknown destinations (155,700 MT) and China (65,500 MT). Sales for 2015/16 were less than impressive too at 127,500 MT. Meal sales were better at 87,100 MT on the old crop and 176,600 MT for new crop. Trade estimates were around 200-500 TMT for both marketing years combined on beans and 100-300 TMT for meal. "To date China has bought 2.4 MMT of new crop beans from the US with another 2.8 MMT on the books for unknown destinations. For same period last year, China had already booked 6.27 MMT of new crop beans with sales to unknown destinations of 3.78 MMT," noted Benson Quinn. Informa reduced its 2015 US soybean production estimate to 3.808 billion bu versus 3.850 billion from the USDA. MDA CropCast cut their forecast by 33 million bu to 3.718 billion, with yields reduced from 45.5 bu/acre to 45 bu/acre. Informa are at 45.1 bu/acre and the USDA say 46.0 bu/acre. A Bloomberg survey into trader/analyst sentiment found 13 to be bullish, 9 bearish and 7 neutral on soybean price prospects. The Argentine Ag Ministry said that farmers there are 51% sold on their 2014/15 soybean crop versus 43% sold a year ago. Jul 15 Soybeans closed at $10.45 1/4, up 1 1/4 cents; Nov 15 Soybeans closed at $10.30 1/4, up 3/4 cent; Jul 15 Soybean Meal closed at $357.40, down $2.40; Jul 15 Soybean Oil closed at 33.36, up 35 points.

Corn: The corn market closed around 5-6 cents higher. Weekly export sales of 594,300 MT for delivery in 2014/15 were up 20 percent from the previous week and 14 percent above the prior 4-week average. There were also net sales of 238,900 MT for 2015/16. Trade estimates for that were in the 450-850 TMT region for both marketing years combined so these were at the top end of expectations. Continued US wetness seems to have this year's corn production potential shrinking. "Sharply colder Midwest temperatures this week are detrimental for corn and soybeans, not only retarding growth and development but also slowing evaporation from soggy fields. Excessively heavy June rainfall, among the highest on record, has encouraged 'ponding' in the low lying areas. Small corn and soybeans planted in June are most susceptible to drowning. The crop area for harvesting is apt to shrink, as flooded corn and soybeans are damaged beyond repair. The Midwest forecast continues very wet, as exceptionally heavy rainfall is predicted for the 5th straight week," said Martell Crop Projections. Informa came out with a US 2015 corn yield estimate of 165.4 bu/acre, with total production estimated a 13.412 billion bushels versus their previous estimate of 13,564 billion and the USDA’s 13.630 billion. MDA CropCast lowered their yield forecast from 166 bu/acre to 165 bu/acre and cut production by 226 million bushels to 13.525 billion, a near 6% drop on a year ago. A Bloomberg survey into trader/analyst sentiment found 12 to be bullish, 10 bearish and 7 neutral on corn price prospects. French corn crops are starting to enter their silking phase in southern France where temperatures topped 100C this week. MDA CropCast cut their view on EU corn production by 0.26 MMT to 61.5 MMT today, a near 10% drop on a year ago. They reduced the world crop by 6 MMT to 952 MMT. The EU Commission forecast a French corn crop of 16 MMT this year. Jul 15 Corn closed at $4.19 3/4, up 6 cents; Dec 15 Corn closed at $4.37 1/4, up 5 1/2 cents.

Wheat: The wheat market closed mostly a tad lower. Weekly export sales of 363,900 MT were in line with expectations. Concerns over wheat crop conditions in Canada and Europe add to worries about this year's US winter wheat crop. "Rainfall in May and June was well below normal in Canada’s western prairies, increasing moisture stress in wheat and canola. Saskatchewan was especially hard hit by drought with the majority of farms receiving under 40% of average rainfall. in May and June. Alberta drought was said to be historically significant in May, though June rainfall has increased, stabilizing crops and improving conditions to a degree. Manitoba the smallest of the 3 wheat provinces has succumbed to drought in June, having begun the growing season with favourable field moisture. Prairie drought may be linked to the El Nino," said Martell Crop Projections. "A dry spring in Europe has been followed by a wetter June , improving soil moisture in key wheat areas. However, it’s not been enough rainfall to replenish field moisture in France and Germany, the leading wheat countries. Spring rainfall was severely deficient depleting ground moisture, predisposing wheat to moisture stress. In the United Kingdom, the 3rd top wheat producing country, wheat was also threatened by abnormally dry spring weather, though drought was less widespread. A heat wave in late June has added to worries for the French wheat crop, now filling grain. Maximum temperatures have frequently exceeded 32 C (90 F) since June 20," they added. Temperatures in France actually reached 39C (102F) on Wednesday, according to AccuWeather. A Bloomberg survey into trader/analyst sentiment found 9 to be bullish, 12 bearish and 8 neutral on wheat price prospects. The Argentine Ag Ministry said that farmers there are 83% sold on their 2014/15 wheat crop versus 60% sold a year ago. MDA CropCast cut their view on US winter wheat production by 80.6 million bushels to 1.457 billion. Although durum and other spring wheat output was raised, US all wheat production was lowered 52.5 million bushels to 2.133 billion. Informa now have the US winter wheat crop at 1.477 billion bushels. Jul 15 CBOT Wheat closed at $5.85 3/4, down 1 3/4 cents; Jul 15 KCBT Wheat closed at $5.76, unchanged; Jul 15 MGEX Wheat closed at $6.06 1/4, down 1 1/4 cents.