Nogger's Blog

30/09/15 -- Soycomplex: Beans closed around 6-7 cents higher, as the USDA pegged Sep 1 US soybean stocks at 191 million bushels, around 14 million below the average trade guess, although nearly 100 million higher than a year ago. The lower than expected number came as they reduced 2014 US yields to 47.5 bu/acre from the 47.8 bu/acre that they had previously. They also reduced the 2014 harvested area by 470k acres. That revised down 2014 production to 3.93 billion bushels, down 41.7 million from their previous estimate. Arlan Suderman of Water Street Solutions says that the USDA's September ending stocks estimate has "proved to be too high in 13 of the past 19 years by an average of 101 million bushels." He also points out another very interesting statistic that the "USDA was projecting 2014-15 soybean ending stocks to be 475 million bushels a year ago. We found out this morning that they were actually 191 million bushels." All of this of course casts a fair degree of doubt over the 2015 production and stocks numbers that we currently have before us. Certainly we can now say that old crop carry-in was in fact lower than the USDA thought. In other news the Argentine Ag Min said that farmer selling there on 2014/15 beans was 68.7% complete versus 60.7% a year ago. Growers there have also sold 1% of their new crop, planting of which will begin next month. China’s Golden Week starts tomorrow, meaning that their markets will be closed through to Wednesday October 7. That may reduce export sales somewhat in the week ahead. Before that we are due the usual weekly export sales report from the USDA. Published trade expectations for that are 1.3 MMT to 1.7 MMT for beans, and 100-275,000 MT for meal. There were no sales announcements today. Which beggars the question what's happened to the 13 MMT that China bought last week? Hardly any of that has shown up under the daily reporting system yet. Nov 15 Soybeans closed at $8.92, up 7 3/4 cents; Jan 16 Soybeans closed at $8.94, up 6 1/2 cents; Oct 15 Soybean Meal closed at $308.30, up $2.60; Oct 15 Soybean Oil closed at 27.10, down 36 points.

Corn: The corn market closed around a cent or so lower. The USDA put US Sep 1 corn stocks at 1.731 billion bushels almost identical to the average trade estimate of 1.739 billion bushels. The range of estimates was 1.647-1.850 billion and September 1 2014 corn stocks were 1.232 billion. The US Energy Dept reported weekly ethanol production at 943,000 barrels/day, that's up 5,000 bpd from the previous week although that's still the second lowest weekly volume since the first week of May. "Year-to-date corn use for the new marketing year is estimated to be 400 million bushels of corn, up 15 million or 4% from the previous year," said Arlan Suderman. Ethanol stocks shrank by 100,000 barrels from the previous week to 18.8 million barrels. Trade estimates for tomorrow's weekly export sales report are said to be around 700,000 MT to 1.0 MMT. The Argentine Ag Ministry reported farmers there are 73% sold on their 2014/15 corn crop, around the same percentage as this time last year. For new crop they are said to be 1% sold versus 1.7% this time last year. India and Bangladesh are said to be in the market for Brazilian corn. Egypt is also looking for what will probably be either Black Sea of French corn. The Ukraine corn harvest is ongoing and yields are reported to be well below where the USDA believes that they will end up. Russia's corn yields are slightly better than expectations. The EU Commission estimated this year's corn crop at 58.4 MMT versus a previous estimate of 58.7 MMT. Now that we have the USDA's stocks data out of the way, the trade will be looking to see what they have to say in their October WASDE report. Will they finally start to trim back US corn yields, now that they have much more "hard evidence" in from the field? The bulls will be hoping/expecting a 2-3 bu/acre cut to confirm that the worst is over for them. Note the strong seasonal tendency for corn to put in the lows early in October. Dec 15 Corn closed at $3.87 3/4, down 1 1/4 cents; Mar 16 Corn closed at $3.98 3/4, down 1 cent.

Wheat: The wheat market closed with decent gains after a fairly friendly USDA report. That put US Sep 1 all wheat stocks at 2.089 billion bushels, up 182 million from the previous year but down 60 million from pre-report trade expectations. US 2015 all wheat production was estimated at 2.052 billion bushels, down 84 million from their August estimate. It was also 81 million below the average trade guess of 2.133 billion bushels, and below the lowest in the range of estimates given. In other news, the EU Commission raised their forecast for this year's EU soft wheat crop to 144.6 MMT versus a previous estimate of 140.7 MMT. That's around the middle of the range of recent analyst's forecasts. The Argentine Ag Ministry said that growers there are almost 100% sold on old crop wheat. They are also said to be 2.2% sold on new crop versus 5.7% committed this time a year ago. Japan bought 23,600 MT of feed wheat and 12,300 MT of barley in a tender for Dec shipment. Rusagrotrans said that Russia's September grain exports via deep sea ports would only total 1.54 MMT, down from their original forecast of 1.74 MMT, down also from 1.97 MMT in August and also lower than the 1.69 MMT shipped out in September 2014. They suggest that some exports have been held back to take advantage of the new more preferential export duty on wheat that begins tomorrow. There's still plenty of talk of dryness issues in Russia and Ukraine with regards to winter sowings for the 2016 harvest. The Russian wheat harvest is said to be complete on 24.2 million ha (versus only 21.1 million a year ago). That's over 90% of the planned area, producing 60.7 MMT so far (57.8 MMT a year ago), with yields down 8.4% at 2.51 MT/ha. Kazakhstan said that they'd completed harvesting on 11.4 million ha, or 77.3% of plan, producing a crop of 13.76 MMT so far versus 12.83 MMT a year ago. The harvest there should be wrapped up in the next 10-15 days, according to the Ag Ministry. Trade estimates for tomorrow's weekly export sales report are a modest 250-450,000 MT. Dec 15 CBOT Wheat closed at $5.12 3/4, up 9 cents; Dec 15 KCBT Wheat closed at $5.01 3/4, up 7 cents; Dec 15 MGEX Wheat closed at $5.27, up 6 3/4 cents.