Nogger's Blog

08/12/16 -- Soycomplex: Beans closed with sharp losses. Weekly export sales were decent at 1,461,700 MT for 2016/17 (plus 6,000 MT for 2017/18), being up 10 percent from the previous week and 5 percent from the prior 4-week average. Exports of 1,869,700 MT were down 19 percent from the previous week and 31 percent from the prior 4-week average, but still pretty good for the time of year. The USDA also announced another 136,000 MT of soybean sales to unknown destinations under the daily reporting system. CONAB’s Brazilian soybean production estimate of 102.4 MMT was down only slightly from 102.6 MMT in November and represents around a 7.0% increase from Brazil’s 2015/16 total of 95.4 MMT. The USDA ag attaché in Brazil estimates this year’s soybean crop lower than that at 101 MMT, with exports at 57 MMT. The USDA are out tomorrow with their December WASDE report, and we can probably attribute most of today's action to profit-taking and book-aquaring ahead of that. The range of guesses for US soybean ending stocks is 428 to 514 million bu versus the previous 480 million, with an average of 474 million. Jan 17 Soybeans closed at $10.27, down 22 cents; Mar 17 Soybeans closed at $10.37 3/4, down 21 3/4 cents; Dec 16 Soybean Meal closed at $312.40, down $6.80; Dec 16 Soybean Oil closed at 37.05, down 67 points.

Corn: The market closed with losses of around 4 cents heading into tomorrow's USDA report. Weekly export sales of 1,495,400 MT for 2016/17 were up 96 percent from the previous week and 12 percent from the prior 4-week average. That easily beat trade estimates that were running at around 700,000 and 1,000,000 MT. Exports of 1,366,400 MT were up 69 percent from the previous week and 94 percent from the prior 4-week average. The primary destinations were Japan (292,000 MT), Mexico (256,700 MT), Taiwan (214,000 MT), Saudi Arabia (182,000 MT) and Peru (72,800 MT). Brazil planting is almost 93% complete while Argentina is still lagging at 48% complete. Brazil's CONAB is estimating summer corn crop potential of 2016/17 at 27.06 MMT, down from the November forecast of 28.55 MMT, but still a 7% increase over last year. Brazil full crop estimate was essentially unchanged from November at 82.8 MMT, a sharp increase versus 2015/16. CNGOIC lowered it's forecast China's on corn consumption at 197 MMT, well below the USDA's 226 MMT. Trade ideas for tomorrow's world corn ending stocks estimate from the USDA is 219.2 MMT, which would be 1 MMT larger than the November report. The Russian corn harvest is 86.8% complete at 14.8 MMT. Dec 16 Corn closed at $3.46 1/2, down 4 cents; Mar 17 Corn closed at $3.53 1/2, down 4 1/2 cents.

Wheat: The wheat market closed higher heading into tomorrow's report, possibly due to short-covering in Chicago. Weekly export sales of 503,100 MMT for delivery in marketing year 2016/17 were up 4 percent from the previous week, but down 22 percent from the prior 4-week average. That was at the upper end of the expected 300,000 MT to 500,000 MT though. Exports of 555,500 MT were up noticeably from the previous week and 59 percent from the prior 4-week average. India announced that they were to cut their current wheat import duty from 10% to zero. Trade ideas are that they could end up importing around 3 MMT, and possibly as much as 5 MMT, on the back of the move before new crop begins harvesting again in late Mar/April. That would be their largest imports since 2006/07. Australia and Ukraine are likely to be the main beneficiaries, but at least it would remove some surplus stocks from the global market. Sub-zero temperatures on the US Plains keep getting a muted mention, but the trade seems relaxed about winter kill ideas for now. Saudi Arabia are tendering for 715 TMT of hard wheat for Feb/Apr shipment, Ethiopia are in for 70 TMT of optional origin milling wheat. The average of pre-report trade estimate for 2016/17 global ending stocks is 250.3 MMT in tomorrow's report. Dec 16 CBOT Wheat closed at $3.90 3/4, up 4 1/2 cents; Dec 16 KCBT Wheat closed at $3.87, up 5 cents; Dec 16 MGEX Wheat closed at $5.35 3/4, up 1 3/4 cents.