Nogger's Blog

28/07/15 -- Soycomplex: Beans closed higher, in a Turnaround Tuesday style of sorts. The recovery was only a partial one of what was lost yesterday though. The USDA didn't raise good to excellent crop ratings in last night's report, which was contrary to general expectations. They said that 71% of the crop is blooming, one point behind the 5-year average and that the proportion of the crop setting pods is 34%, double that of a week ago and 3 points ahead of the 5-year average. The Chinese stock market was down another 1.5% today, making for a 2-day loss of 10%. They are of course far and away the world's largest soybean buyer, being expected to account for almost two-thirds of global soybean trade in 2015/16, according to current USDA forecasts. Oil World said that due to sharply lower EU and world rapeseed/canola production this year the oilseed's premium over soybeans will continue to widen. Rapeseed oil should trade higher than soybean oil throughout most of 2015/16, they said. That also suggests that the relationship between rapeseed meal and soybean meal could stay skewed outside of what might be considered to be the "traditional" range. Oil World see EU soybean imports seen rising 4.5% to 14.5 MMT in 2015/16, with soybean meal imports up 3.9% to 21.5 MMT, reported Bloomberg. EU rapeseed imports are estimated up 8.6% to 2.64 MMT in 2015/16, they added. Ukraine, typically a large exporter to Europe, is 81% complete on it's 2015/16 rapeseed harvest producing a crop of 1.4 MMT to date, suggesting final output of around 1.7 MMT versus 1.8 MMT currently from the USDA and down 23% on a year ago. Aug 15 Soybeans closed at $9.74 3/4, up 13 1/2 cents; Nov 15 Soybeans closed at $9.44 3/4, up 11 1/2 cents; Aug 15 Soybean Meal closed at $345.20, up $1.00; Aug 15 Soybean Oil closed at 30.66, up 55 points.

Corn: The corn market staged a modest couple of cent recovery following yesterday's rout. Unlike with soybeans, the USDA did raise corn crop ratings in line with trade ideas - up one point to 70% good to excellent. They said that 78% of the crop is silking, up from 55% a week ago and versus 77% typically at this time. In addition 14% of the crop is at the dough stage versus 17% on average for this week. The ten and thirty year average for this week in the crop year (week 30) in the good to excellent category is 61% and 64% respectively, say Benson Quinn. All in all things are pretty good then really. Crop conditions were 5 points better than this a year ago and that harvest went on to break all previous records by the proverbial country mile. "Last year, it was Iowa farmland that flooded in June with 10 inches of rainfall. However, while flooding set back corn development, the final result was surprisingly good. Iowa corn yields averaged 178 bushels per acre, and 2% above average (trend). Iowa corn gradually recovered last season with exceptional July coolness and below average rainfall. How do current weather conditions compare? Temperatures this summer have been moderately cool in July, though not nearly as cool as last year in the Midwest," noted Martell Crop Projections. Ukraine remain busy exporting corn, with 831 TMT of the grain already shipped out this month. The Ukraine Ag Ministry are forecasting the country to export a new record grain volume in 2015/16, with corn shipments at around 19.8-21 MMT. The USDA currently only estimate these at 16 MMT, down 2 MMT from 18 MMT in 2014/15. South Korea's MFG bought 139,000 MT of optional origin corn for Dec-Jan shipment in a tender. The USDA reported 120,000 MT of sorghum sold to China, with delivery split between both crop years. There remains talk of Beijing looking to do something to restrict sorghum imports in favour of shifting some of their own huge domestic corn stocks. Sep 15 Corn closed at $3.75, up 2 cents; Dec 15 Corn closed at $3.85 1/2, up 2 cents.

Wheat: The wheat market closed higher, recovering most of yesterday's losses. The USDA now have the 2015 US winter wheat harvest at 85% complete, up 5 points on the 5-year average. The spring wheat harvest is 2% done, which is 3 points behind the average for this time. Spring wheat crop conditions were up one point in the good to excellent category. A Wheat Quality Council’s spring wheat tour started today and ends on Thursday. Scouts are surveying fields in the Dakotas and Minnesota. "The first leg of the wheat tour notes yield potential above a year ago with one potential exception being a leg of the tour that went through Northern SD, but still recorded a yield in the neighborhood of 55 bpa vs. 65 bpa the prior year. The reports I have seen do not indicate that disease pressure is anything more than routine," said Benson Quinn's Brian Henry. India are said to have imposed a 10% import duty on wheat, the first such move in 8 years. The hope/aim is encourage local millers to use more of the government's stocks, the quality of which is usually questionable at best, and that's in a good year. This year's harvest was hit by rain and hail just before it started, cutting quality and leading to a rash of early season imports of mostly Australian wheat to blend in with their own inferior crop. The USDA's FAS raised their estimate for the Russian 2015 grain crop to 97 MMT, down 6% on a year ago. That includes 56 MMT of wheat, which is 3 MMT less than a year ago. They see grain exports in 2015/16 at 29 MMT, of which 21 MMT will be wheat. The Russian Ag Ministry said grain production could exceed 101 MMT this year. UkrAgroConsult estimated the Russian grain crop at 98 MMT, down 2 MMT from previously. That includes 57.5 MMT of wheat. They trimmed their 2015/16 Russian grain export forecast from 30 MMT to 28 MMT, of which 20 MMT will be wheat (down from 20.5 MMT previously). Sep 15 CBOT Wheat closed at $5.10 3/4, up 8 1/4 cents; Sep 15 KCBT Wheat closed at $5.04 3/4, up 5 1/2 cents; Sep 15 MGEX Wheat closed at $5.40 1/4, up 3 1/4 cents.