Chicago Close - Friday

01/06/12 -- Soybeans: Jul 12 Soybeans closed at USD13.44 1/4, up 4 1/4 cents; Nov 12 Soybeans closed at USD12.58, down 12 1/4 cents; Jul 12 Soybean Meal closed at USD394.50, unchanged; Jul 12 Soybean Oil closed at 48.59, down 61 points. For the week front month Jul 12 beans were 37 3/4 cents lower and Nov 12 was down 31 1/4 cents. Meal fell USD14.80 and soyoil slumped 153 points. A very weak performance by crude oil in May continued into the first day of June with NYMEX ending the day down more than USD3.00/barrel for a loss of over 8% on the week. Fund selling on beans was fairly light under the circumstances, estimated at 3-4,000 contracts on the day. Weekly soybean export sales of 418,700 MT were below trade ideas of 450-700 TMT and less than half of last week's 954 TMT. The early winter wheat harvest, and rains this week in some of those areas, may encourage increased double cropping with beans boosting this year's acreage above current USDA projections by around a million acres according to some pundits.

Corn: Jul 12 Corn closed at USD5.51 1/2, down 3 3/4 cents; Dec 12 Corn closed at USD5.10, down 12 cents. On the week as a whole Jul 12 was down 27 cents and Dec 12 down 11 1/2 cents. Funds were said to have been net sellers of around 3-5,000 corn contracts on the day. As with beans, an alarming slump in crude oil values, coupled with dismal US jobs data and falling equities piled pressure on corn. Jul 12 hasn't closed this low since November 2010. US crude oil stocks are at 22 year highs, gasoline consumption is falling leading to lower ethanol incorporation. Weekly export sales were just 282,700 MT - well below the expected 450-650 TMT. Concerns over hot and dry weather next week were eased somewhat when the latest weather forecasts adopted a less threatening look. "The jet stream forecast shows a ridge of high pressure over the Great Plains weakening Monday through Wednesday, not strengthening as indicated on yesterday's forecast. Temperatures would be much cooler in the northern half of the United States and closer to normal," said Martell Crop Projection. Unconfirmed rumours suggest that China has bought 300,000 MT of US corn this week.

Wheat: Jul 12 CBOT Wheat closed at USD6.12 1/4, down 31 1/2 cents; Jul 12 KCBT Wheat closed at USD6.37, down 28 cents; Jul 12 MGEX Wheat closed at USD7.39 1/2, down 13 1/4 cents. For the week Chicago Jul 12 fell 67 3/4 cents, with Kansas down 63 cents and Minneapolis falling 46 3/4 cents. For Chicago wheat almost half the week's losses came today in what was a very "bad boy" performance. Funds were said to have sold around 7-10,000 Chicago contracts on the day. Weak outside markets also weighed on wheat, but perhaps more so due to the fact that harvesting of winter wheat is already underway. The market seems to expect good winter wheat harvesting progress over the weekend. We have 3-4 months to go yet before we get any harvest pressure on corn or soybeans. Cereal harvesting in Europe and the Black Sea is also drawing ever closer. Weekly export sales were 319,200 MT, below trade expectations of 350-500 TMT and well down on last week's 827 TMT. The recent dollar strength will continue to hinder US export potential. It is interesting to note that Jul 12 CBOT wheat, which rallied 16.5% in the week ended 18th May has subsequently given up most of those gains to now only stand 2.5% above the lifetime contract low.