Nogger's Blog

13/10/15 -- Soycomplex: Beans closed sharply higher on strong demand. For all the talk of China's economy being under pressure, their appetite for soybeans appears to be undiminished. Customs data has them importing 7.26 MMT of beans last month, a record for the month of September and up 44% year-on-year. September concludes the 2014/15 marketing year. So the full total imports for that is now a record 78.3 MMT, up 11.3% versus the 70.36 MMT imported in 2013/14. Calendar year imports (Jan/Sep) are up 13% versus the same period in 2014 at almost 60 MMT. To back up the "strong demand" story, the USDA today announced 240,000 MT of US beans sold to China for 2015/16 shipment. Rumours overnight that China is looking at replenishing their domestic edible oil stocks also leans friendly, especially at a time when palm oil production in Indonesia and Malaysia is under question and prices for that are rising. The one day delayed weekly export inspections numbers added further support today, coming in at over 1.8 MMT, up more than 50% on last week and easily beating trade expectations of 1.0-1.2 MMT. We need to consider though that any rise in prices will only encourage South American growers to increase plantings. Dr Cordonnier estimated Brazil’s 2015/16 soybean planted area at 33.3 million ha versus a previous estimate of 33.0 million. He increased his production forecast from 99 MMT to 100 MMT. He sees Argentina’s 2015/16 soybean crop at 60.0 MMT, unchanged from previous his estimate. After the close the USDA left US crop ratings unchanged at 64% good to excellent. They said that 92% of the crop is dropping leaves, one point ahead of the 5-year average, and that this year's harvest is 62% done, up 20 points on last week and 8 points ahead of the recent norm. Nov 15 Soybeans closed at $9.14, up 26 1/2 cents; Jan 16 Soybeans closed at $9.18 1/4, up 25 3/4 cents; Oct 15 Soybean Meal closed at $320.70, up $11.40; Oct 15 Soybean Oil closed at 28.60, up 59 points.

Corn: The corn market closed higher in Turnaround Tuesday style, helped by surging soybeans. The move came despite weekly export inspections of 573,298 MT falling short of the expected 625-750,000 MT. Marketing year corn shipments for the season so far are down 24% versus 2014/15. EU and Black Sea corn production is seen significantly lower this year. UkrAgroConsult today estimated the 2015 Black Sea corn crop at 47.0 MMT, down 9% from 2014 due to hot and dry weather. Ukraine's crop appears to have been particularly badly affected. They estimate that at 23 MMT, down 11% on last year and 2 MMT below the current USDA forecast. Agritel have the crop a fraction lower than that at 22.98 MMT. UkrAgroConsult have the Romanian corn crop estimated at 9.0 MMT versus 11.4 MMT in 2014, and the Bulgarian corn crop at 2.5 MMT versus 3.14 MMT last year. Meanwhile on Friday the French Farm Ministry estimated this year's corn crop in Europe's largest producing nation at only 13.1 MMT, down from 13.5 MMT previously and almost 28% below last year. Production prospects also seem to be in decline in South America too. Dr Cordonnier estimated South America’s total 2015/16 corn crop at 107.1 MMT versus a previous estimate of 110.2 MMT and down nearly 7% from the 2014/15 crop of 115.1 MMT. He estimated Brazil’s 2015/16 total corn crop at 81.2 MMT versus a previous estimate 84.3 MMT versus 85.4 MMT in 2014/15. In the US he was said to have pegged 2015 corn yields at 167.5 bu/acre, slightly below the USDA's figure of 168.0 bu/acre but up from his previous estimate of 165.0 bu/acre. South Korea's NOFI are said to be tendering for up to 207,000 MT of optional origin corn for Mar–Apr shipment. After the close the USDA left US corn crop ratings unchanged from a week ago at 68% good to excellent. They said that 94% of the crop is mature, up 3 points versus the 5-year average. They put this year's harvest at 42% complete, up from 27% a week ago but still slightly behind the 5-year average of 43% done. Dec 15 Corn closed at $3.84 1/2, up 3 3/4 cents; Mar 16 Corn closed at $3.95 1/2, up 3 3/4 cents.

Wheat: The wheat market finished the day with decent gains. As with corn, these came despite weekly export inspections disappointing. These came in at 290,717 MT versus the expected 500-625,000 MT and down 48% from a week ago. Marketing year shipments are down 17% from the previous year. Japan seeks 116,782 MT of food wheat for Dec shipment in it's regular weekly tender. As normal the origins specified are split between US, Canadian and Australian wheat. Jordan cancelled a tender to buy 100,000 MT of optional origin hard wheat for Feb-March shipment. Concerns about dryness causing lower wheat production in the Black Sea region and Australia continues to get plenty of interest. US wheat isn't out of trouble either. The USDA put US winter wheat plantings at 64% complete, up from 49% a week ago but 2 points behind the 5-year average. The crop is said to be 33% emerged versus 20% a week ago and 36% for the recent norm. They haven't yet started reporting on crop conditions. "Dry conditions have developed in the US heartland over the past several weeks, furthering the corn and soybean harvest while also hampering wheat planting and germination. Hot temperatures recently have developed in the Great Plains, highs in the 90s F, contributing to declining field moisture," said Martell Crop Projections. "The 3 leading wheat states Kansas,Oklahoma and Texas are much drier than normal. Wheat planting has moved forward but germination has been retarded by the dry topsoil conditions. Hot temperatures are expected to continue in the Great Plains encouraging high evaporation and strong drying. Light showers are possible in West Texas and Oklahoma, while Kansas would continue dry," they add. Russia said it had harvested 63.3 MMT of wheat and 18.1 MMT of barley off 98.3% of the planned area of both. These weights are before cleaning and screening which would typically knock off around a further 5-7%. SovEcon estimated the final Russian wheat crop at 60.8 MMT, and see barley production at 17.4 MMT. The Russian Ag Ministry say that winter grains have now been planted on 14.8 million ha, or 86.4% of the forecast area versus 15.2 million a year ago. Dec 15 CBOT Wheat closed at $5.19, up 12 1/4 cents; Dec 15 KCBT Wheat closed at $5.11, up 13 1/4 cents; Dec 15 MGEX Wheat closed at $5.36 1/4, up 8 cents.