Chicago Market Back On The Up

12/07/12 -- Soycomplex: Jul 12 Soybeans closed at USD16.25 3/4, up 2 3/4 cents; Nov 12 Soybeans closed at USD15.29, up 6 1/2 cents; Jul 12 Soybean Meal closed at USD478.80, up USD0.80; Jul 12 Soybean Oil closed at 53.15, down 47 points. Despite prices being close to their highest in history demand for soybeans remains strong with Brazilian crushers reported to be buying from Argentina to keep themselves going, and planting of the 2012/13 crop doesn't begin for more than two months yet! Weekly US export sales were above expectations once again at 332,100 MT for 2011/12 and 427,100 MT for 2012/13. Funds were said to have been net buyers of around 4,000 soybean contracts on the day. New crop sales are running at a record pace, with most of it destined for China or "unknown" - usually the same thing. This week's USDA figures place China accounting for 64% of all world soybean exports in 2012/13. Over a quarter of the entire 2011/12 world production will be imported by China this year.

Corn: Jul 12 Corn closed at USD7.71 1/4, up 20 1/2 cents; Dec 12 Corn closed at USD7.32 1/4, up 28 1/4 cents. Funds were said to have been net buyers of around 20,000 corn contracts on the day. Weekly export sales were better than last week at 172,700 MT for 2011/12 and 492,100 MT for 2012/13. Suggestions that, faced with this year's huge decline in anticipated US corn yields, the US would consider reducing the ethanol mandate were quashed by the US Ag Secretary. The USDA only cut demand from the ethanol sector marginally from 5 billion bushels to 4.9 billion on Wednesday. "The strong cooling that was forecast for the Midwest has not materialised this week. Instead, above normal warmth has prevailed, though not as extreme as the heat wave previously. Very dry soils are heating up faster in the morning, due to less evaporative cooling from the surface. There has been no morning dew, because of parched fields and dry atmospheric conditions," report Martell Crop Projections.

Wheat: Jul 12 CBOT Wheat closed at USD8.32 3/4, up 25 cents; Jul 12 KCBT Wheat closed at USD8.37, up 16 cents; Jul 12 MGEX Wheat closed at USD9.32 3/4, up 18 3/4 cents. Funds were said to have been net buyers of around 4,000 Chicago wheat contracts on the day. Weekly export sales of of 311,800 MT were fairly modest. Reports out of Canada suggest that the winter wheat harvest there will be 2-3 weeks ahead of normal. There is increased talk of an El Nino weather event unfolding in the next few months. Unfortunately that will come too late to assist US crops, but just in time to potentially hinder Australian winter wheat development. Meanwhile a sharp drop in wheat production in the Black Sea region this year will see their export ambitions take a severe dent in 2012/13. On Wednesday the USDA pegged wheat production from Russia, Ukraine and Kazakhstan 26 MMT down on output in 2011.