Nogger's Blog

22/10/15 -- Soycomplex: Beans closed lower as the market simply currently seems to view being above $9/bu as a selling opportunity. The move came despite strong weekly export sales of over 2 MMT beating trade expectations of 1.2-1.8 MMT. Actual exports of 2.33 MMT were a marketing-year high and were up 49 percent from the previous week. Despite another strong week of sales, current commitments are only 77.4% of what they were a year ago, although accumulated exports are 11% ahead of a year ago. The USDA also announced 463,000 MT of US beans sold to unknown for 2015/16 shipment under the daily reporting system. Dryness concerns remain in northern/central Brazil. "October rainfall typically is 150-200 millimetres, but planting conditions this season have been very dry. Mato Grosso’s Centre West soybean area received only 26% of normal rainfall over the past 30 days. The Centre East was similarly dry," said Martell Crop Projections. This could ultimately threaten yields and support prices in the region, said Rabobank. They are therefore more cautious on production potential this year, currently estimating Brazil's crop at 97 MMT. They forecast prices remaining in the $9.00-9.25/bu region, with meal at $315-325 and oil at 28.0-30.5 across the next 12 months. They forecast US 2015/16 ending stocks below 200m bu. MDA CropCast raised their forecast for the global soybean crop by 0.1 MMT from a week ago to 308.3 MMT, with the US 2015 crop unchanged at 3.863 billion bushels. A Bloomberg survey into trader/analyst sentiment in soybeans found 12 bulls, 8 bears and 6 neutrals. Nov 15 Soybeans closed at $8.98 3/4, down 6 1/2 cents; Jan 16 Soybeans closed at $9.01, down 8 1/2 cents; Dec 15 Soybean Meal closed at $307.80, down $2.70; Dec 15 Soybean Oil closed at 28.85, down 33 points.

Corn: The corn market closed around 2-3 cents lower. Weekly export sales of 248,000 MT for 2015/16 were down 59 percent from the previous week and 57 percent below the prior 4-week average. The market was expecting sales of 450-650,000 MT. Total sales so far are only 65% of what they were a year ago at this time. Exports of 409,800 MT were less than stellar too, being down 33 percent from the previous week and 39 percent below the prior 4-week average. Media reports suggested that China could buy about 50% less corn for state reserves in the 2015/16 season than in 2014/15, as local governments offer subsidies to encourage processors to use more domestic grain. Purchases at this sharply reduced level would still raise Chinese corn stocks to 200.0 MMT, it is said. CNGOIC estimated China’s 2015/16 corn crop at a record 228.0 MMT, up 6% from a year ago. MDA CropCast were unchanged on their 2015/16 world corn production estimate, and likewise on this year's US crop at 13.695 billion bushels. They said that they expect final 2015 US corn yields to be closer to 166 bu/acre than the 168 bu/acre currently being used by the USDA. That would tighten US 2015/16 ending stocks by around 160m bu, taking them almost 20% below last season's carryout, they said. That however assumes that the USDA's export numbers are correct. Rabobank forecast US corn prices at $3.80/bu at the turn of the year, rising modestly to $4.10 and $4.20 in the first two quarters of 2016, before falling back a little to end next year at $3.90/bu. A Bloomberg survey into trader/analyst sentiment in corn found 12 bulls, 5 bears and 9 neutrals. Indonesia’s Ag Min estimated Indonesia’s 2015/16 corn imports at 3.0 MMT, little changed versus 3.1 MMT in 2014/15. Russia's 2015 corn harvest is said to be 67.3% done at 9.3 MMT with average yields of 5.10 MT/ha, up 11.8% on a year ago. Dec 15 Corn closed at $3.78 1/4, down 2 1/2 cents; Mar 16 Corn closed at $3.88, down 2 1/4 cents.

Wheat: The wheat market closed around 4-5 cents lower, in tandem with the other markets. Weekly export sales predictably failed to "pull up any trees" at 357,500 MT for delivery in marketing year 2015/16, being down 22 percent from the previous week. They were however in line with albeit modest trade expectations. Exports of 211,900 MT were rather poor, being down 43 percent from the previous week and 60 percent below the prior 4-week average. Concerns over Russian/Ukraine dryness with regards to winter plantings continue, although better weather is said to be in the forecast. The head of Russia’s Grain Union apparently said that 30% of Russia’s winter grain area is currently at risk due to dry weather. The Russian Ag Ministry said that winter grains have been planted on 15.5 million ha, or 90.7% of their forecast, down from 16.2 million this time a year ago. Rusagrotrans estimated Russia's October grain exports at 3.5 MMT, up a little on 3.42 MMT a year ago. Wheat exports this month will total 2.7 MMT versus 2.46 MMT a year ago, they said. Total Jul/Oct grain exports will be 14.62 MMT versus 14.94 MMT a year ago, with wheat shipments down to 11.51 MMT from 12.31 MMT. Exports of both barley (2.17 MMT versus 1.91 MMT) and corn (845 TMT versus 584 TMT) are seen higher than a year ago during this period. Ethiopia are in the market for 1 MMT of wheat, with Black Sea offers said to be the keenest. Japan bought 134,352 MT of food wheat for Nov-Dec shipment split mostly in favour of US origin. South Korea's CJ are in for 50,000 MT of Australian hard wheat. MDA CropCast were unchanged on their world and US (2.218 billion bu) wheat production estimates. Rabobank estimate US wheat prices around $5.00-5.25/bu through until the end of 2016. In line with other analysts they see Australia's crop at 23-24 MMT versus the USDA's "toppy" 27 MMT estimate. Bloomberg's survey found 8 wheat bulls, 6 bears, and 12 neutrals. Dec 15 CBOT Wheat closed at $4.90 3/4, down 4 cents; Dec 15 KCBT Wheat closed at $4.75 1/2, down 5 cents; Dec 15 MGEX Wheat closed at $5.08, down 3 3/4 cents.