Nogger's Blog

27/08/15 -- Soycomplex: Beans closed higher, helped by strong new crop weekly export sales which included heavy Chinese interest. The USDA reported net old crop cancellations of 131,600 MT, but new crop sales of an impressive 1,457,400 MT which were primarily for China (887,500 MT) and unknown destinations (399,500 MT). Trade expectations were for combined net sales of around 0.5-1.0 MMT. These new crop sales were up 86% from the previous week. Exports of 231,400 MT were down 42 percent from the previous week. Cumulative exports for 2014/15 are now 49.47 MMT with 2 weeks of the season left to run. The USDA forecast for the entire season is 49.67 MMT. The USDA also reported that 130,000 MT of soybeans sold to unknown destinations for 2015/16 delivery under the daily reporting system. These will be included in next week's export sales. The Chinese stock market was up more than 5% today, posting its first rise in 6 sessions, adding a bit more to the friendly tone. Lanworth estimated US soybean yields at 46.2 bu/acre, with production at 3.85 billion bushels. The USDA were at 46.9 bu/acre and 3.916 billion bushels earlier this month, and production was 3.969 billion bushels a year ago. The IGC added 2 MMT To their global 2015/16 soybean forecast, taking that up to 318 MMT, which is 4 MMT below production in 2014/15. They also added 3 MMT to global consumption in 2015/16 and cut ending stocks by 4 MMT to 44 MMT. The USDA currently peg the world bean crop at 320 MMT in 2015/16 and have carryout far higher, almost double the IGC's number in fact, at 86.9 MMT. The reason for the discrepancy is unclear. The IGC said that world rapeseed/canola production this year would fall 9% due to disappointing crops in Europe and Canada. The USDA have production 10% lower at 64.58 MMT. MDA CropCast raised their world rapeseed production estimate by 0.36 MMT to 63.99 MMT. Canada's crop was estimated at 13.23 MMT, down 15.6% on a year ago. Sep 15 Soybeans closed at $8.86 1/4, up 8 1/2 cents; Nov 15 Soybeans closed at $8.79, up 14 cents; Sep 15 Soybean Meal closed at $322.90, down $1.50; Sep 15 Soybean Oil closed at 26.89, up 77 points.

Corn: The corn market closed around a couple of cents firmer. Weekly export sales showed net cancellations of 131,800 MT for delivery in 2014/15, a marketing-year low, which the USDA said "was down noticeably from previous week and from the prior 4-week average." There were net sales of 986,600 MT on new crop and actual exports themselves came in at 820,600 MT. Cumulative shipments to date this season total 44.13 MMT versus a USDA target of 46 MMT with two weeks left to go. Lanworth estimated the US corn crop at 13.7 billion bushels on yields of 166.8 bu/acre. The USDA are currently using a figure of 13.686 billion bushels, with yields at 168.8 bu/acre. Production last year was 14.216 billion bushels. Agritel said that this year's Ukraine corn crop could be closer to 25 MMT than the 26-27 MMT previously expected due to heat and dryness during the grain filling stage. They see exports at 15 MMT. The USDA have production at 27 MMT and exports at 17.5 MMT. The Ukraine Ag Ministry said that the country had exported 2.74 MMT of grain (mostly corn) to China between Jan–Jun this year, almost 8 times more than a year ago. MDA CropCast cut their world corn production estimate by 0.73 MMT from a week ago to 948.4 MMT, mainly due to reductions in expectations for Argentina. Their 2015/16 corn crop is now estimated at 22 MMT, down from 24 MMT in 2014/15. The USDA still have the 2015/16 Argentine corn crop at 25 MMT. The IGC added 2 MMT to their world corn production estimate, taking their figure up to 968 MMT, which represents a 3.5% decline versus 2014/15. They see global consumption unchanged from previously at 972 MMT and added 3 MMT to world ending stocks taking those up to 198 MMT. The latter is some 3 MMT higher than the USDA's August WASDE forecast. The IGC have the US corn crop estimated at 340.0 MMT (or 13.385 billion bushels) versus a previous estimate of 332.0 MMT. They slashed their outlook on the EU corn crop to 60.1 MMT from a previous estimate of 66.9 MMT. Arlan Suderman of Water Street Solutions reported that at a grain industry conference in Southeast Asia this week one of the speakers projected corn prices below $3 per bushel. "Sources say that the projection was based on big production prospects, sluggish demand and comparisons with grain price drops in the big financial collapse of 2008," he said. Sep 15 Corn closed at $3.63 3/4, up 2 cents; Dec 15 Corn closed at $3.75, up 1 3/4 cents.

Wheat: The wheat market closed lower. Weekly export sales of 529,100 MT for delivery in 2015/16 were up 68 percent from the previous week, but down 7 percent from the prior 4-week average. That actually beat albeit modest trade expectations of 250-425 TMT, but that still wasn't enough to get a rally out of the wheat market. Exports of 357,200 MT were down 41 percent from the previous week and 15 percent below the prior-4 week average. The Buenos Aires Grain Exchange said that excessive wetness in Argentina may have washed out around 2% of their estimated 3.7 million ha of winter wheat plantings. There's talk that Brazil may have bought a few US HRW cargoes over the past week or so, but they didn't show up as a featured buyer in today's weekly export sales report. Taiwan were said to have bought 49,350 MT of US milling wheat for October shipment. APK Inform estimated the Ukraine wheat crop at 25.1 MMT in clean weight, up 4% on 24.1 MMT a year ago. They see domestic consumption at 12 MMT and 2015/16 wheat exports at 12.5 MMT, slightly below the USDA's 13 MMT figure. SovEcon estimated Russia’s 2015 grain crop at 101.0 MMT versus a previous estimate of 99.0 MMT. Rabobank estimated Australia’s wheat crop at 23-24 MMT. MDA CropCast cut their forecast for the global wheat crop by 1.17 MMT to 714.5 MMT due to dryness in Canada where their crop was estimated at 25.1 MMT versus 29.9 MMT a year ago. The IGC added 10 MMT to their world wheat production estimate, taking that up to 720 MMT - essentially the same as a year ago. Although they increased consumption by 4 MMT they added 5 MMT to world ending stocks taking those up to an ample 206 MMT. In fact, world 2015/16 total grain stocks would hit a 29-year high of 447 MMT, they said. They have the Russian wheat crop estimated at 59.0 MMT versus a previous figure of 54.0 MMT. They see Ukraine at 25.0 MMT versus a previous estimate of 22.0 MMT, and have Europe at 151.9 MMT versus a previous estimate of 148.5 MMT. They lowered their outlook on Canadian production this year though, down to 25.5 MMT from a previous estimate of 28.0 MMT. ACPB (a French Growers Group) estimated France’s 2015 soft wheat crop at a record in excess of 40 MMT, with yields also at a record 7.8 MT/ha. Egypt purchased just one cargo of Russian wheat in their tender. The price paid was said to be little more than $190/tonne. They then immediately released another tender, the results of which are expected tomorrow. Sep 15 CBOT Wheat closed at $4.84 1/4, down 5 1/2 cents; Sep 15 KCBT Wheat closed at $4.64 1/2, down 2 cents; Sep 15 MGEX Wheat closed at $4.94 1/2, down 1 3/4 cents.