Nogger's Blog

19/10/15 -- Soycomplex: Beans closed lower on a combination of harvest pressure and gloomy economic news from China, despite stellar weekly export inspections of 2.365 MMT. News that the Chinese economy grew by 6.9% in Q3 of 2015 was viewed as bearish, even if it did beat forecasts of 6.8%, as it was the first time that growth has fallen below the government's target of 7% since early 2009. China’s September industrial output only rose 5.7% versus the expected 5.9% and compared to 6.1% in August. The impressive weekly export inspections number, which easily beat the expected 1.2-1.8 MMT, means that the season to date total is now nearly 15% larger at the same time a year ago. And that is amidst supposed concern over Chinese demand/sales. In addition, the USDA announced 238,000 MT of US beans sold to China for 2015/16 shipment under the daily reporting system today. The slow start to planting in Brazil's leading state of Mato Grosso appears to be picking up. IMEA said on Friday that Mato Grosso soybean planting is 14.3% complete versus 6.1% a week ago and now ahead of 9.3% a year ago. Rains are in the forecast next week for northern Brazil. The Buenos Aires Grains Exchange forecast Argentina’s 2015/16 soybean area at 19.8 million ha in it's first estimate of the season, down 1% from last year. The Ukraine sunflower harvest is said to be 96% complete at just over 10 MMT, and they've also produced more than 3 MMT of soybeans off 84% of the planned area. After the close the USDA said that this year's US soybean harvest was 77% complete, up from 62% a week ago and versus 68% for the 5-year average. Nov 15 Soybeans closed at $8.91, down 7 1/4 cents; Jan 16 Soybeans closed at $8.95 1/2, down 6 1/2 cents; Dec 15 Soybean Meal closed at $310.80, down $1.20; Dec 15 Soybean Oil closed at 28.14, down 46 points.

Corn: The corn market closed around 3-4 cents lower, it too overshadowed by Chinese woes. Weekly export inspections of 459,812 MT were a bit below the expected 500-700,000 MT too. Last week's inspection were also below expectations, as indeed were those of the week before that as well. Season to date inspections are now 24% behind those of a year ago. Strong competition from South America remains a thorn in the side of US export ambitions. Taiwan were said to have bought three cargoes of South American corn for Feb-April shipment. Mexico, Japan and Egypt are said to be seeking corn. The US should win the Mexican business, but perhaps not the other two. South American corn is said to be offered around $10-12/tonne cheaper than US material on a FOB basis. Dr Cordonnier said that heavy rains in southern Brazil continue to hamper corn export activity. Paranagua missed 10 days of exports in September and has been closed for a further 7 days so far this month due to rain. Waiting times there are now up to 40 days to get vessels loaded, he added. The Buenos Aires Grains Exchange forecast Argentine 2015/16 corn plantings to be down 20% from the previous year at 2.72 million ha, and some private estimates are even lower. China offered 5.4 MMT of state-owned corn stocks up at auction last Thursday and Friday and apparently didn't sell anything at all. Russia said that it's 2015 corn harvest was 59.7% complete at 8.3 MMT off 1.6 million ha. Ukraine said that it's corn harvest was 61% complete at 12.88 MMT. The Ukraine Ag Ministry had cut their forecast for this year's corn crop there to 22.9 MMT, a near 20% slump on 28.5 MMT a year ago due to heat and dryness. The USDA were unchanged on US corn crop conditions at 68% good to excellent versus 74% this time last year. They said that 98% of the crop is mature, up 4 points from a week ago and 2 points ahead of the 5-year average. The 2015 US harvest is 59% complete versus 42% a week ago, 30% done a year ago and 54% for the 5-year average. Dec 15 Corn closed at $3.73, down 3 3/4 cents; Mar 16 Corn closed at $3.83 3/4, down 4 cents.

Wheat: The wheat market closed lower to start the week. Chicago wheat fared the better of the three, although all sustained some fairly significant losses. Poor weekly export inspections of only 205,468 MT set the tone. Expectations were a fairly modest 300-500,000 MT, but even that bar proved to have been set too high. Season to date inspections are down around 20% on a year ago. South Korea's CJ Cheiljedang Corp bought 61,000 MT of US wheat for Feb shipment in a tender for 31,000 MT. South Korea's Daehan bought 50,000 MT of Australian wheat for April shipment and the country's KFMC bought 61,300 MT of Australian and US wheat for Feb-March shipment. Russia said that it had harvested 63.6 MMT of wheat so far this season off 99.1% of the planned area. Russian customs data says that they exported 894.6 TMT of grains last week, including 496.8 TMT of wheat and 134.1 TMT of barley. Season to date exports are said to be 13.57 TMT, including 10.02 MMT of wheat. Calendar year exports are 26.2 MMT, of which 60% (15.7 MMT) is wheat. A chief commodity analyst at ABARES estimated Australia’s 2015/16 wheat crop at 24.0 MMT versus the previous official ABARES estimate of 25.28 MMT and the USDA's current estimate of 27.0 MMT. Jordan are tendering for 100,000 MT of hard wheat and 100,000 MT of barley, both of optional origin. The USDA said after the close that US 2015/16 winter wheat plantings had caught up, with 76% of the crop on the ground versus 64% a week ago, 75% a year ago and 77% for the 5-year average. They put the crop at 49% emerged, exactly in line with the 5-year average. They were expected to release their first crop condition ratings of the season but didn't. India announced a sharp upward revision to its wheat import tax, up from 10% to 25%. The increased duty will be in effect until March 31, 2016. Ukraine's winter grain crop is said to be 78% planted, and Russia's is 88% done. Much needed rains are in forecast for central Ukraine and southern Russia in the next 10 days. Dec 15 CBOT Wheat closed at $4.85 3/4, down 6 1/2 cents; Dec 15 KCBT Wheat closed at $4.72 1/4, down 11 1/4 cents; Dec 15 MGEX Wheat closed at $5.04 1/2, down 7 3/4 cents.