Nogger's Blog

02/08/13 -- Soycomplex: Old crop Aug 13 closed at the lowest level for a front month since March 2012, whilst new crop Nov 13 beans finished at a 14 month low. The US weather outlook remains benign, talk of cool and damp conditions for the next two weeks followed by warmer and drier from the middle of August onwards is adopting an almost ideal look. China confirmed that they will auction off 500 TMT of soybeans from government reserves, not as much as the 3 MMT that was rumoured, but then again more than the flat denial that they'd issued to date. The Brazilian Ministry reported that they'd exported 5.66 MMT of soybeans in July, down from 6.5 MMT in June, although up on the 4.13 MMT shipped in July 2012. China were said to have bought Brazilian beans for March shipment yesterday. The Brazilian Ministry pegged July soymeal exports at 1.60 MMT versus 1.27 MMT in June and 1.54 MMT a year previously. Informa Economics are due to release their August crop production estimates on Monday. With new crop Nov taking out the April low today, there's talk that USD11.50 is the next target, with even a chance of testing USD11.00 if that level could be broken. Interestingly, USD11.00 was the bottom of the market in 2011, we haven't seen nearby beans trade below that level since October 2010. Aug 13 Soybeans closed at USD13.31, down 26 3/4 cents; Nov 13 Soybeans closed at USD11.81 1/2, down 11 cents; Aug 13 Soybean Meal closed at USD412.10, down USD13.30; Aug 13 Soybean Oil closed at 42.38, down 11 points. For the week nearby beans fell 18 3/4 cents, with meal down USD18.20 and oil sliding 120 points.

Corn: Aug 13 corn finished at a lifetime closing low for the contract and also the lowest close for a front month on the continuous charts since the early days of October 2010. New crop Dec 13 hasn't been this low since almost then either. The trade will be eyeing Informa's crop production estimates on Monday, with FCStone having come out with a production number close to 14 billion bushels and also a yield estimate above that of the USDA yesterday. China’s COFCO bought 120 TMT Ukraine corn for Oct/Nov shipment. South Korea's NOFI cancelled a tender to import 70 TMT of optional origin corn for Jan shipment in anticipation of lower prices. Vietnam bought 150 TMT South American corn for Dec shipment. The Buenos Aires Grain Exchange said that the corn harvest in Argentina is 96.5% complete versus 93.2% a week ago and 95.7% a year ago. They have the Argentine 2012/13 corn crop estimated at 24.8 MMT, unchanged from their previous estimate and well below the Argentine government's forecast of 32.1 MMT. The Brazilian Trade Ministry said July corn exports were 733,300 MT vs. 276,300 MT in June and 1.70 MMT in July 2012. With new crop Dec 13 now at more than 2 1/2 year lows there's lots of talk of USD4.50 being tested, and maybe even lower. Rabobank have USD4.25 in their sights for Q2 of 2014. With international buyers looking to cheaper corn/feed wheat options out of the Black Sea or South America, a potentially record US crop and plateauing US ethanol production, the outlook for US corn prices remains bearish without a weather threat. Sep 13 Corn closed at USD4.76, down 11 1/2 cents; Dec 13 Corn closed at USD4.63 3/4, down 3 1/4 cents. For the week that puts Sep 13 down 16 cents, with Dec 13 down 12 1/4 cents.

Wheat: The wheat market closed narrowly mixed, with corn keeping a lid on rally attempts. Whilst there might be plenty of wheat around globally in 2013/14 how much of it is up to milling wheat standard remains to be seen. There are reports of quality issues in Europe, Russia, China and even the US emerging this week. Brazil bought 50-60 TMT of US HRW wheat yesterday for August shipment. They are said to have bought around 500 TMT of US wheat over the past week. Bangladesh bought 40 TMT of Indian wheat. Pakistan has bought 250 TMT of Black Sea wheat and is looking for more. Thailand bought 110 TMT of cheap Black Sea feed wheat for Oct/Nov shipment today. The USDA attache in Canada forecast the wheat crop there at 29.4 MMT, the highest since 1992/93 and up 8% on last year. Canadian wheat exports will total 19.5 MMT in 2013/14 - the most since 1997/98 - the attache said. Despite that ending stocks in 2013/14 will also climb from 4.9 MMT last season to 5.6 MMT, they added. Russia’s Grain Union estimated August grain exports at 2.5-3.0 MMT versus 2.0 MMT in July. Of that 2.0-2.5 MMT will be wheat versus 1.7 MMT in July, they added. Kazakhstan's Ag Ministry estimated their 2013 grain crop at 16.3 MMT versus a previous estimate of 15.0 MMT. The Buenos Aires Grain Exchange said that Argentine wheat planting is 95.3% complete versus 92.7% a week ago and 94.0% a year ago. They have the Argentine 2013/14 wheat planted area estimated at 3.9 million hectares, unchanged from their previous forecast. Sep 13 CBOT Wheat closed at USD6.60 1/2, up 2 1/2 cents; Sep 13 KCBT Wheat closed at USD7.06 3/4, unchanged; Sep 13 MGEX Wheat closed at USD7.41 1/4, down 1/2 cent. For the week Chicago wheat rose 10 1/4 cents, with Kansas up 15 1/4 cents and Minneapolis 4 3/4 cents firmer.