Chicago Close - Wednesday

30/05/12 -- Soybeans: Jul 12 Soybeans closed at USD13.73 1/4, down 13 1/2 cents; Nov 12 Soybeans closed at USD12.93, down 1/2 cent; Jul 12 Soybean Meal closed at USD409.90, down USD2.60; Jul 12 Soybean Oil closed at 49.69, down 48 points. Outside markets dragged beans lower, with crude oil sharply lower and Spain now competing with Greece for centre stage as the European debt crisis lurches on. NYMEX crude closed below USD88/barrel for the first time since October. Funds sold an estimated 4,000 soybean contracts on the day. Weather forecasts for the week ahead are not as wet as they were yesterday, offering showers rather than the good soaking that the newly planted crop would prefer. Temperatures are seen moderating though, although the 6-10 day forecast is turning the heat back up again and includes very little rainfall. It would seem that maybe this is due to La Nina lingering on, contrary to what the experts were telling us a month or two ago.

Corn: Jul 12 Corn closed at USD5.59 1/2, down 3 cents; Dec 12 Corn closed at USD5.20 1/2, up 3 cents. Funds were net sellers of 4,000 contracts on the day, with outside influences weighing on old crop. New crop was supported by reduced precipitation forecasts nearby and a drier outlook going forward. Good/excellent crop conditions fell five percentage points this week and the trade is thinking that another 3-5 points could be cut off again on Monday. That makes the USDA's current, and record, 166bpa yield estimate already look way too optimistic. The European crisis continues to undermine the grains complex though, and saw the euro slump to a near 2-year low against the dollar. The current "flight to safety" mode looks like maintaining the recent dollar strength, which may cap some US grains upside.

Wheat: Jul 12 CBOT Wheat closed at USD6.53 3/4, down 3 cents; Jul 12 KCBT Wheat closed at USD6.79, up 1 cent; Jul 12 MGEX Wheat closed at USD7.64, down 7 3/4 cents. Funds were said to have sold around 3,000 Chicago wheat contracts on the day, as part of a general broad-based commodity sell-off. There's rain in the forecast for eastern Kansas, which should benefit later-maturing winter wheat crops there. Spring wheat areas should also get a good chance of rain this week, further enhancing crop conditions which the USDA upped five percentage points to 79% good/excellent on Tuesday. Australian, Ukraine and Russian prospects are seem improving on rains too. The Head of the Russian Grain Union says that they will have a wheat crop comparable with last year at around 56 MMT in 2012/13, and that exports will be 22-23 MMT - 4-5 MMT more than the USDA currently project.