Nogger's Blog

04/11/15 -- Soycomplex: Beans closed around 3-5 cents higher. Linn Group were the latest private forecaster to release their revised US 2015 production estimates today. They estimated this year's US bean crop at 3.942 billion bushels (with yields at 48.0 bu/acre) versus a previous estimate of 3.898 billion and the USDA October estimate of 3.888 billion. Informa were 3.952 billion yesterday and FCStone 3.917 billion on Monday, so it looks like these estimates are now being fine-tuned pretty close together. The USDA are out on Tuesday with their November forecasts. The average trade estimate for that now seems to be around 3.914 billion bushels with yields at 47.5 bu/acre versus the USDA’s October number of 47.2 bu/acre, according to a Bloomberg survey. Reuters report that Argentine farm activity has slowed right down ahead of the Nov 22 presidential run-off. Strong competition from Brazil remains, even if Argentine sellers are biding their time. Brazilian soybean exports totalled 2.59 MMT in October, up from 0.741 MMT during October 2014. Trade estimates for tomorrow's weekly export sales report for beans are 1.4-1.8 MMT. Sales have been very strong on recent weeks, so something in excess of 2 MMT is a possibility. Meal was the weakest leg of the complex today. Oil World said meal prices may continue fall on increased soybean crushings. They see the global 2015/16 soybean crush at 272.7 MMT, up 5.9% from a year ago. Nov 15 Soybeans settled at $8.82, up 3 1/2 cents; Jan 16 Soybeans settled at $8.84, up 5 cents; Dec 15 Soybean Meal settled at $301.80, up $0.50; Dec 15 Soybean Oil settled at 28.50, up 35 points.

Corn: The corn market closed little changed. Linn Group estimated the 2015 US corn crop at 13.334 billion bushels versus a previous estimate of 13.266 billion and the USDA's October estimate of 13.555 billion. They see average yields at 165.6 bu/acre. Informa had US 2015 corn yields at 170.1 bu/acre with production at 13.718 billion bu yesterday. FCStone estimated US 2015 corn yields at 168.0 bu/acre, with production at 13.543 billion bu on Monday. For Tuesday's WASDE report the average trade guess is for production at 13.564 billion bu (the USDA were 13.555 billion last month) and a yield of 168.2 bu/acre (the USDA were 168.0 bu/acre in October). Weekly ethanol production data was supportive today. The Energy Dept said that average daily ethanol production last week was 969,000 barrels per day, up 25,000 bpd from the week before, and the largest since the week ending July 17. Brazilian ethanol prices are said to be at near 6-month highs, prompting US buyers to cancel/defer Brazilian purchases and switch back to US supplies. The US dollar was a bit firmer today as Fed chair Yellen raised the possibility of a US interest rate rise in December. She said that the US economy is performing well, and that whilst no firm decision has yet been made, an increase "could be appropriate". That could harm US already flagging exports. Trade estimates for tomorrow's weekly export sales report are a fairly modest 450-650,000 MT. Export sales remain slow, and a firmer US dollar isn't going to help. Apart from the very first week of the 2015/16 marketing year, which included outstanding sales carried over from the end of the 2014/15 season into the new campaign, we have to go back fully 39 weeks all the way to the first week of February to find weekly corn sales in excess of 1 MMT. Dec 15 Corn settled at $3.80 1/2, unchanged; Mar 16 Corn settled at $3.88 1/4, down 1/2 cent.

Wheat: The wheat market closed with fairly decent gains. There wasn't a great deal of fresh news out there, so perhaps today's price action had more to do with short-covering than anything else? Concerns remain over the state of winter wheat in Russia and Ukraine, and these are likely to remain right through to the spring when we get a better handle on just how badly these crops have emerged from the winter. Spring rains remain critical, and it is of course far too early to have any idea what they are going to be like. It won't be long before winter-kill issues are getting a mention either, but for now at least all of this is merely conjecture. IKAR said that Russia's 2016 grain crop should make "at least" 100 MMT, but then added the caveat that a downgrade to 96 MMT was "quite possible". They see production this year at 103 MMT, so a drop to 96-100 MMT couldn't be classed as catastrophic. UkrAgroConsult say that only 27% of Ukraine winter wheat is "good" and that 32% is weak or thinned. The last time things were that bad was winter 2011 (for the 2012 harvest) when wheat was rated slightly better at 30% "good" and production went on to slump 29% year-on-year to 15.76 MMT. They currently say that wheat production there in 2016 could dive around 30% to only 19 MMT. Ukraine officials say that production this year was 26.5 MMT and that 55% (14.6 MMT) of that was of milling standard. They forecast domestic milling wheat needs at 5 MMT, with exports at 8.8 MMT and closing stocks at 2.5 MMT. Milling wheat exports out of Ukraine so far in 2015/16 are said to be 4.3 MMT. Taiwan are tendering for 92,000 MT of US wheat for December-January delivery. Jordan are in the market for 100,000 MT of optional origin wheat. Trade estimates for tomorrow's weekly export sales report are a moderate 300-500,000 MT. Potential US dollar strength going forward will continue to limit these. Dec 15 CBOT Wheat settled at $5.26 1/4, up 9 3/4 cents; Dec 15 KCBT Wheat settled at $4.92 3/4, up 5 1/4 cents; Dec 15 MGEX Wheat settled at $5.24 1/4, up 4 1/2 cents.