Nogger's Blog

18/12/15 -- Soycomplex: Beans closed with decent gains on the day and for the week. Private exporters reported the sale of 220,046 MT of US soybeans to unknown destinations for 2015/16 delivery. Northern Brazil remains hot and dry. In Goias, the fourth largest soybean producing state in Brazil, the local farm group were said to have cut its 2015/16 production figure by nearly 6% to 9.8 MMT. In Argentina farmers are said to be 77% sold on old crop beans versus 73% sold a year ago. On new crop they are said to be 4% committed, similar to their position 12 months ago. The Argentine peso is now floating, and devalued by as much as 30% versus the US dollar yesterday. Whilst this may encourage some fresh exports it is also going to mean some production increases down the line too. Jan 16 Soybeans settled at $8.92 1/4, up 15 1/4 cents; Mar 16 Soybeans settled at $8.92 3/4, up 15 cents; Jan 16 Soybean Meal settled at $281.00, up $5.10; Jan 16 Soybean Oil settled at 30.53, up 46 points. For the week, Jan 16 beans were 21 3/4 cents higher, with Jan 16 meal up $8.80 and Jan 16 oil down 55 points.

Corn: The corn market closed with little change on the day, or for the week. Argentine growers were said to be 85% sold on old crop corn versus almost 92% a year ago. They are 8% sold on new crop corn against 13% committed a year ago. The new president and his promise to cut the export duty on corn therefore don't appear to have made any difference to farmers' selling strategy's just yet. That could start to filter through shortly though. The trade is still adjusting to the "new Argentina" under the leadership of president Macri. The corn acreage in Argentina could expand by 20% to 30% in 2016/17 as farmers revert back to a more normal rotation between corn and soybeans, said Dr Cordonnier. Ukraine said that it had finally finished it's 2015 grain harvest, bringing in a crop of 61.1 MMT, down 5% from 64.37 MMT a year ago. The corn harvest this year finished up at 23.25 MMT (USDA: 23.00 MMT this year and 28.45 MMT in 2014). Brussels announced 462 TMT worth of EU corn import licences this past week. Talk of a Brazilian corn boat heading for the US might cap market upside ideas. Mar 16 Corn settled at $3.74 1/2, up 1/4 cent; May 16 Corn settled at $3.80 1/2, up 1/4 cent. Mar 16 corn ended the week 1 1/2 cents higher than it began it.

Wheat: The wheat market closed mixed on the day, but with decent gains for the week. Argentine growers are said to be 11% sold on new crop wheat against 35% committed a year ago at this time. Morocco are said to be in the market for 360 TMT of milling wheat and 315 TMT of durum wheat, both of US origin, in an inter-governmental deal between the two countries. Jordan said that it had bought 100,000 MT of optional origin milling wheat and immediately tendered for a similar volume for Apr/May shipment. The EU said that they'd issued a record weekly volume of soft wheat export licences for the 2015/16 marketing campaign this week. Cumulative season to date licences are still down considerably versus 12 months ago (-16%), but this number is now dropping on an almost weekly basis - it was almost double that deficit at the end of November. The Deutsche Bank are predicting a GBP/USD exchange rate of 1.35-1.40 "in 2016/17" and a EUR/USD exchange of 0.95 next year. Both rates are significantly below where those respective currencies currently trade, and should make it even more difficult for US wheat to compete on the export front going forward. May 16 CBOT Wheat settled at $4.93, up 2 cents; May 16 KCBT Wheat settled at $4.92 1/4, up 1 1/4 cents; May 16 MGEX Wheat settled at $5.17 1/2, down 3 3/4 cents. For the week that puts Chicago wheat 10 1/4 cents higher, with Kansas up 24 cents and Minneapolis 19 1/4 cents firmer.