Nogger's Blog

06/07/15 -- Soycomplex: Beans closed with double digit losses, and much closer to session lows than session highs. Today was in fact the last ever daytime open outcry session in a Chicago history dating back almost as far as the US Civil War. We're all electronic from here on in. The overnight market opened badly following the Greek referendum result, which resulted in a general commodity "risk off" move, and in the case of beans failed to recover from that initial negative input. There was also talk that the long weekend in the US had a drier bias to areas already sodden by recent heavy rainfall, which lent a bit bearish. There's some talk of a drier, warmer, more summer-like weather scenario developing over the next couple of weeks. The dollar was up on the back of the Greek result, another negative today. Weekly export inspections came in at 197,441 MT, at the top end of trade expectations. AgRural said that the Brazilian grower is 77% sold on his 2014/15 soybean crop (versus 81% a year ago) and 17% sold on his not yet planted 2015/16 crop (3% a year ago). After the close the USDA reported the 2015 US soybean crop at 96% planted, in line with trade estimates, up only 2 points in a week and compared to 100% done a year ago and for the 5-year average. The remaining 4% is 3.4 million acres of unplanted beans using the USDA's June 30 acreage figure of 85.14 million acres. Missouri is only 73% complete versus 97% on average at this time, although 9 other states are also incomplete at levels ranging from 94-99% done. Soybean emergence was placed at 93%, up 4 points from a week ago, but still 4 points behind the 5-year average. They had 21% of the crop blooming, in line with normal. The all-important crop condition ratings held steady at 63% good to excellent (versus 72% a year ago), generally in line with trade ideas, although few if any were expecting an improvement so I guess that's as good as it was likely to get. A Bloomberg survey estimated ratings dropping one point to 62% on average. The delayed weekly commitment of traders report showed managed money net long more than 67k lots as of last Tuesday night. They were long less than 2k lots the previous week. Jul 15 Soybeans closed at $10.33 3/4, down 11 1/2 cents; Nov 15 Soybeans closed at $10.14 3/4, down 15 1/2 cents; Jul 15 Soybean Meal closed at $354.40, down $3.00; Jul 15 Soybean Oil closed at 32.64, down 72 points.

Corn: The corn market closed around a cent or two lower, although it had been running into double digit losses at one stage. All in all, corn did a better job off shaking off the initial overnight blues than soybeans, perhaps helped by wheat managing to turn around to trade in the green. Weekly export inspections were in line with trade ideas at 839,324 MT, even if they were down a bit on around 1.0-1.1 MMT where they have been running recently. The long weekend was said to have consisted of largely dry weather for the Midwest, featuring considerable sunshine hours and warming temperatures, a nice break from recent cool and wet conditions. Forecasts for the week ahead are mixed, still wet on the Southern Plains through into Missouri. East of the Mississippi valley, Midwest corn and soybeans would be less wet though, expecting 150% to 200% of normal rainfall, said Martell Crop Projections. There could be some heat this coming Friday to Saturday but it should be short lived. The USDA said after the close that corn crop conditions had improved 1 point in the good to excellent category, up from 68% a week ago to 69%, although still lagging 75% this time last year. A Bloomberg survey forecast ratings dropping one point to 67%, so this was a little surprise. Ohio is in the worst state, literally, at 45% good to excellent, followed by Indiana (48% G/E) and Missouri (51% G/E). The best conditions are in Pennsylvania (85% G/E), Minnesota (84% G/E), Wisconsin and Kentucky (both 83% G/E). "Now that acres have been pegged the market will be trading weather to a higher degree. Analysts continue to back off of lofty expectations for the crop size, but much of that has already been priced in at this point. Better than expected condition ratings could be enough to push prices lower over the session tomorrow," said Benson Quinn. In other news, APK Inform said that Ukraine seaports had exported 478.6 TMT of grains in the past week through to Sunday night, with corn accounting for 75% of that total. Spanish market analysts Agroinfomarket left their estimate for this year's corn crop there unchanged on previously at 10.806 MMT, up slightly on 10.741 MMT a year ago. They raised imports in 2015/16 a little, up to 6.25 MMT versus 6.15 MMT previously and 5.75 MMT in 2014/15. The weekly commitment of traders report shows a major turnaround for managed money in the week through to Tuesday night, where they flipped from a net short of almost 95k lots to a net long of over 70k contracts. Jul 15 Corn closed at $4.18 1/2, down 1 1/4 cents; Dec 15 Corn closed at $4.35, down 2 1/4 cents.

Wheat: The wheat market closed higher, turning around initially much lower early trade nicely. Jul 15 Chicago wheat ended 2 3/4 cents higher, having traded as low as 18 1/2 cents easier at one stage. Latest forecasts call for wetness to continue on the Southern Plains, again disrupting the winter wheat harvest and potentially adding more quality/disease issues. "The 7-day rainfall forecast calls for strong showers this week again. A wide swath of heavy rainfall would extend from west Texas, Oklahoma and Kansas northeastward through Missouri. Five to 6 times the normal rainfall is predicted," said Martell Crop Projections. Meanwhile: "A heat wave in the West Coast is damaging wheat potential in Washington, the 3rd largest US winter wheat state. The entire western United States is in the throes of a heat wave, where a large, stable ridge of high pressure dominates," they added. The USDA cut winter wheat crop conditions one point to 40% good to excellent, saying that harvesting of this year's crop was 55% complete, up from only 38% done a week ago and catching up with the 5-year average of 59%. Drier conditions this past week have allowed the leading producing state of Kansas to advance from 48% harvested a week ago to 79% done as of Sunday night. The 5-year average is 83% harvested. Missouri lags the 5-year average by 20 points at 68% harvested. Ohio is only 13% complete against 37% normally, and Indiana has cut 39% of this year's crop against 60% on average. US spring wheat crop conditions were cut two points in the good to excellent category to 70%, now the same as a year ago. The USDA said that the crop is well advance, at 76% headed against 47% on average at this time. Canada got some rain this past weekend, but totals were scattered and less than half an inch. Weekly US export inspections were in line with what was expected at 368,818 MT. The strong US dollar remains a thorn in the side of these. The weekly commitment of traders report shows managed money having a change of heart on Chicago wheat, flipping from a net short of more than 50k lots to a new net long of 14k contracts. Elsewhere they are reports of lower wheat and barley production in Spain this year due to a dry May and extreme heat in June. Agroinfomarket cut their Spanish soft wheat production estimate from 5.483 MMT a month ago to 5.065 MMT, and down 9.4% compared to 5.590 MMT a year ago. Egypt said that, following recent tenders and a strong domestic buying campaign, it now has enough wheat bought to last it through into Jan 2016. Algeria bought 500 TMT of probably French wheat for August shipment over the weekend. Jul 15 CBOT Wheat closed at $5.88 1/2, up 2 3/4 cents; Jul 15 KCBT Wheat closed at $5.76 1/4, up 1/4 cent; Jul 15 MGEX Wheat closed at $6.18 3/4, up 12 1/2 cents.