Chicago Storms Higher

02/08/11 -- Corn: Chicago grains stormed higher, led by corn, which closed up the daily 30 cent limit on the nearby Sep and Dec which finished at USD7.11 1/4 and USD7.15 3/4 respectively. The market opened quietly, questioning the validity of the USDA's latest crop condition report which saw good/excellent deteriorate in most of the major producing states yet stay unchanged overall at 62%. The trade has been factoring in a yield figure of around 155 bu/acre but FCStone came out with 153.2bpa mid-session and another analyst just 150bpa to send the market soaring through USD7.00/bu resistance. Funds were said to have bought heavily at 23,000 contracts. Add that to yesterday's purchases and they've increased their net long by the equivalent of 4.5 MMT this past two days.

Soybeans: Aug 11 Soybeans closed at USD13.73, up 14 1/4 cents; Nov 11 Soybeans closed at USD13.79 3/4, up 17 3/4 cents; Aug 11 Soybean Meal closed at USD357.20, up USD4.50; Aug 11 Soybean Oil closed at 57.09, up 94 points. The soybean market got dragged higher by corn and the two point drop in last night's good/excellent ratings. Outside markets like crude oil and global economic concerns prevented things from getting too much out of hand. FCStone estimated the 2011 US soybean crop at 3.145 billion bushels with a yield of 42.4bpa. Last month the USDA said 3.225 billion and 43.4bpa. The USDA announced 550,000 MT of old crop soybeans sold to China switching into new crop. Funds bought an estimated 5,000 bean contracts on the day along with 2,000 each in meal and oil.

Wheat: Sep 11 CBOT Wheat closed at USD7.18, up 41 1/2 cents; Sep 11 KCBT Wheat closed at USD8.08, up 36 3/4 cents; Sep 11 MGEX Wheat closed at USD8.49 1/2, up 15 1/4 cents. Wheat did a complete u-turn as corn stormed to limit up, Minneapolis wheat was over 20c lower early doors, with funds buying an estimated 6,000 contracts on the day. Short-covering in Chicago wheat may have been responsible for that being the strongest leg. Vomitoxin is reported to be a problem in late planted spring wheat following an exceptionally wet start to the growing season. Next week's USDA WASDE report should see production and export estimates raised in the Black Sea countries and probably Europe too - at least in the case of output. That may see a corresponding decline in US export potential in 2011/12.