Nogger's Blog

27/01/16 -- Soycomplex: Beans closed lower, giving up their Turnaround Tuesday gains. There's continued talk that all is not well with Brazil's crop - even if production expectations are still at record levels. Mato Grosso's IMEA said that 30% of the state's soybean crop is rated poor to very poor, 41% average, and 29% good to excellent. "The worst rated soybeans are those that were planted in September and October because those soybeans received the full brunt of the hot and dry weather during November and December. In some of the hardest hit areas, the crop went as much as 40 days without a rain while the temperatures were very hot," says Dr Cordoniier. "The soybean harvest has started in central Mato Grosso where 40% of the state's soybeans are grown and the yields being reported are extremely variable from a low of 10 sacks per hectare (9 bu/ac) to a high of 60 sacks per hectare (52 bu/ac). The unusual thing this year is that the high and low yields may only be a few miles apart due to the irregular distribution of the rains this growing season," he adds. It would seem that the only thing we can be sure about is that the debate over exactly what size crop they do have this year could rage on for some time yet. The regular Thursday weekly export sales report from the USDA has been delayed a day until Friday due to Monday's "white-out" that closed government offices in Washington. Mar 16 Soybeans settled at $8.83, up 6 1/2 cents; May 16 Soybeans settled at $8.85 1/4, up 6 3/4 cents; Mar 16 Soybean Meal settled at $272.50, up $2.60; Mar 16 Soybean Oil settled at 30.87, up 13 points.

Corn: The corn market closed with changes of less than a cent either way as it has very other day this week so far. This sort of price action highlights farmer reluctance to sell at these levels but also (as we have seen this week with wheat) suggests that you need some sort of "scare story" to spur some fund short-covering if you want the market up. The US Fed said that they were keeping interest rates on hold, which surprised nobody. The did however add that they would not rule out an increase to interest rates in March. That would lead to renewed dollar strength and cause subsequent damage to exports at a time when season to date corn inspections are already down 21.5% from last year. The USDA currently only forecast full season corn exports to decline 7%, so a stronger dollar isn't likely to help any of that lost ground get made up. The Energy Dept reported weekly US ethanol production had fallen 22,000 barrels/day to 961,000 barrels/day from the previous week, and the lowest level of output since late November. In Brazil, safrinha corn planting has been delayed by recent wet weather and the slow early soybean harvest. "The ideal planting window for safrinha corn generally closes about the 20th of February, although some farmers continue to plant corn until about the 10th of March," says Dr Cordonnier. That gives crops enough chance to develop and become established before the dry season kicks in during May. "By far the biggest safrinha crop in Mato Grosso is corn and farmers in the state have only planted approximately 1.3% of their intended safrinha corn crop compared to 3.1% a year earlier," he adds. Mar 16 Corn settled at $3.69 1/4, unchanged; May 16 Corn settled at $3.74 1/2, also unchanged.

Wheat: The wheat market closed lower on what looks like profit-taking following decent gains. The trade is getting more confused by the day over the lack of clarity coming out of Russia concerning it's supposed plans to "tighten restrictive measures on grain exports" - reported earlier in the week on Reuters. Whist the market initially took this as a sign that this might mean reduced wheat exports as the government try to protect the domestic livestock sector from feed price increases, others are now saying that the duty might be decreased, or at least the level at which it kicks in altered to more accurately reflect current grain market/forex rates than those that apply at the moment. A meeting between Russian officials is scheduled for Friday to potentially clarify the matter. Elsewhere, Reuters reported that inspectors from Egypt's GASC had arrived in the Argentine port of Bahia Blanca to approve the first shipments of wheat from Argentina in more than three years in deals done late in 2015. Nobody seems sure of the fate of the French vessel that has been waiting near Egypt’s Damietta port since Dec. 21, according to Bloomberg, apparently rejected on the ground of ergot contamination. Jordan purchased 100 000 MT of hard wheat, of optional origin. Algeria were said to have bought 150,000 MT of optional origin feed barley, with French and possibly even UK material featuring in the mix. AAFC in Canada said that the country's spring wheat acreage may be down 2% this year. May 16 CBOT Wheat settled at $4.82 1/4, down 7 3/4 cents; May 16 KCBT Wheat settled at $4.78, down 9 cents; May 16 MGEX Wheat settled at $5.01 1/4, down 7 1/2 cents.