Nogger's Blog

02/02/16 -- Soycomplex: Beans closed around 7-8 cents firmer in Turnaround Tuesday trade. ADM said that Argentine growers had been slow to sell stored soybeans, having been a bit more interested in gearing up their efforts on corn and wheat following the December Macri election victory. This is backed up by last week's government numbers showing old crop beans at "only" 85.8% committed. Their soybean hoard is estimated in the range of 12 MMT by ADM, selling of which so far has been "disappointing". This may be because Macri reduced the export duty to zero on corn and wheat but only by 5 points down to 30% on beans. The USDA's FAS in Brasilia estimated this year's soybean crop at 98 MMT, a record but 2 MMT short of the current official Washington figure. They see exports at 55 MT versus 56.65 MMT out of Washington. Oil World estimated the global soymeal crop at a record 216.1 MMT in 2015/16, up 5.8% on a year ago. They expect the downwards price trend in meal to continue, and appear to see meal as the weakest leg of the three in the complex across the coming months. Mar 16 Soybeans closed at $8.86 1/4, up 5 1/2 cents; May 16 Soybeans closed at $8.88 3/4, up 6 1/2 cents; Mar 16 Soybean Meal closed at $274.60, up $3.60; Mar 16 Soybean Oil closed at 30.95, up 16 points.

Corn: Corn closed around a cent or two firmer. NYMEX crude settling back below $30/barrel was a drag, but weather conditions in South America are showing subtle signs of changing, possibly suggesting that El Nino strength is wavering. "Weather conditions have been trending drier in Argentina and South Brazil recently reflecting a gradual weakening of the El Nino. Ordinarily a heavy rain maker in the summer growing season December-February. However, areas of dryness have recently developed in Buenos Aires, Cordoba and Santa Fe - the 3 leading farm provinces. Conditions have grown very dry in the past 15 days in Argentina, especially Buenos Aires, the leading farm province and top producer of soybeans and corn. The 30-day rainfall map shows less severe dryness. This suggests that Argentina crops are not in serious trouble yet, still capable of making a good yield if generous rainfall develops soon. January is the main month for rainfall in corn, the period when the crop is pollinating and setting kernels on the ear. The heavier the rainfall, the better. Month-to-date rainfall has been modestly below average not indicating severe cuts in corn production. A bumper harvest is not likely, either," say Martell Crop Projections. Mar 16 Corn settled at $3.72 1/2, up 1 1/4 cents; May 16 Corn settled at $3.77 1/2, up 1 3/4 cents.

Wheat: The wheat market closed with little change, failing to hold onto earlier rally attempts. The move higher was probably linked to Egypt who picked up no sellers at all willing to match their new zero tolerance on ergot in their latest tender requirements. The bottom line is that whatever Egypt settle on as a new realistic minimum, other countries besides the US will be able to match it. Other countries with generally cheaper freight and weaker domestic currencies than the US dollar too. So this isn't really a potential door opener for the US whichever way you look at it. Looking at US winter wheat conditions, the USDA have raised good to excellent in Kansas by 1 point from a month ago to 55%, which is 9 points ahead of this time last year. Illinois, with 65% of winter wheat in good or excellent condition at the end of January, up from 58% in late December. Oklahoma fell from 77% to 74% - although that's still the highest rating for the end of January since at least 2010. Japan are in the market for 141 TMT of US, Canadian and Australian wheat for Mar/Apr shipment. Bangladesh are tendering for 50,000 MT of optional origin milling wheat. Mar 16 CBOT Wheat settled at $4.75 1/4, unchanged; Mar 16 KCBT Wheat settled at $4.65 1/4, down 1 /12 cents; Mar 16 MGEX Wheat settled at $4.95 3/4 cents down a cent.