Nogger's Blog

01/12/15 -- Soycomplex: Beans closed higher. Ideas that biodiesel will make up much of the increased RFS mandate was viewed as supportive (ie. improved demand for soyoil/beans). So too was talk of excessive wetness in southern Brazil, a by product of the strong El Nino, could be causing some problems for beans. Further north in Mato Grosso, the leading soybean state, conditions are still dry. "Mato Grosso’s Centre West soybean area received 248 millimeters of rainfall against 450 mm on average for 55% of average. Drought was less severe in the Center East with 61% of normal rainfall for the 90 days through to Nov 30," say Martell Crop Projections. Brazil's Nov bean exports were 1.44 MMT versus only 0.18 MMT a year previously as the weak real supports the market down there. In Brazilian reals local prices are currently around the same as they were when US prices were $15/bu back in the spring of 2014! Jan 16 Soybeans settled at $8.89 1/4, up 8 1/4 cents; Mar 16 Soybeans settled at $8.91 1/2, up 8 1/4 cents; Dec 15 Soybean Meal settled at $285.70, up $1.10; Dec 15 Soybean Oil settled at 29.78, up 68 points.

Corn: The corn market closed around 1-2 cents higher. Spillover support from yesterday's friendly ethanol mandate announcement was still around today. The wet weather in southern Brazil is seen being more of a problem for full season soybeans than corn. "The full-season corn acreage in the state of Parana is down 19% compared to last year to the lowest level since records have been kept. Farmers continue to shift their full-season corn to soybeans and plant their corn as a second crop instead of the first crop. The full-season corn is 99% planted and the crop is developing normally," says Dr Cordonnier. Brazilian customs data continues to show their corn exports going well. They shipped out 4.76 MMT of corn in November, down from the record 5.5 MMT exported in October, but still a very respectable volume and one that is higher than just under 3 MMT in November 2014. Both the Russian and Ukraine 2015 corn harvests should be wrapping up this week. Ukraine has wasted no time in offering it's "help" should Russia's sanctions against Turkey spread to grains. Dec 15 Corn settled at $3.67, up 2 cents; Mar 16 Corn settled at $3.73 3/4, up 1 1/2 cents.

Wheat: The wheat market closed mixed, with Minneapolis again the strongest leg of the three exchanges. The heavy rains in southern Brazil mean that Parana's wheat crop has been downgraded from 4 MMT to around 3.4 MMT, with much of it probably only suitable for animal feed. "Farmers who managed to harvest their wheat before the onset of the wet weather have been able to sell their higher quality wheat for satisfactory prices. Unfortunately, most farmers are having to cope with not only lower yields and poor quality wheat, but with also low prices," says Dr Cordonnier. "The state's barley crop fared even worse than the wheat. The state is expected to produce only 133,000 MT of barley, which is down 33% from last year's production of 198,000 MT. The way it stands now, Brazil will need to import malting barley and more wheat than they did last year," he adds. ABARES cut their forecast for the Australian wheat crop by 1.3 MMT from their previous estimate to 24.0 MMT, although that's still 0.3 MMT up on a year ago. Jordan finally bought 100,000 MT of hard wheat in their tender. Dec 15 CBOT Wheat settled at $4.56 1/2, down 3 1/2 cents; Dec 15 KCBT Wheat settled at $4.51 1/2, down 5 1/2 cents; Dec 15 MGEX Wheat settled at $5.26 1/4, up 3 cents.