Chicago Market Presses On Higher

02/07/12 -- Soycomplex: Jul 12 Soybeans closed at USD15.32 1/4, up 19 1/2 cents; Nov 12 Soybeans closed at USD14.38, up 10 1/4 cents; Jul 12 Soybean Meal closed at USD442.50, up USD6.50; Jul 12 Soybean Oil closed at 52.18, down 3 points. Funds were said to have been net buyers of 6,000 soybean and 2,000 soymeal contracts on the day whilst selling 4,000 oil. There were rains over the weekend in Iowa, northern Illinois, Indiana and Ohio - generally 3/4 inch but up to 1 1/4 inches in places - but a large portion of the corn belt south of those areas missed out entirely. With daytime temperatures in the 90's and low 100's evaporation will have also been high. The weather forecast for the week ahead offers more of the same, scattered rains and hit temperatures. The USDA announced the sale of 1.19 MMT of new crop soybeans to unknown, presumably China, and clearly not put off by prices over USD15/bu. The USDA pegged the crop at 45% good/excellent, a drop of eight percentage points from last week and double the cut that was expected.

Corn: Jul 12 Corn closed at USD6.92 1/2, up 20 cents; Dec 12 Corn closed at USD6.55 3/4, up 21 cents. Funds were said to have been strong buyers again, booking an estimated 17,000 contracts on the day. The USDA announced the sale of 110,500 MT of US new crop corn to Mexico. Cropcast reduced its estimate for US corn yields to 150.6 bu/acre - some 9% below the current USDA prediction. The IGC raised its world corn production estimate by 4 MMT from last month to a record 917 MMT, estimating the US crop at 350 MMT, which is almost 26 MMT below the USDA's forecast. Despite the reduction in the US corn production prospects have improved sufficiently elsewhere around the globe, in places like China and India, to more than compensate for this, they said. The USDA also cut corn good/excellent ratings by eight percentage points to 48%. Ukraine's state weather forecaster estimated the 2012 corn crop at 22 MMT versus 22.7 MMT in 2011.

Wheat: Jul 12 CBOT Wheat closed at USD7.54 1/2, up 15 1/2 cents; Jul 12 KCBT Wheat closed at USD7.59 1/2, up 21 cents; Jul 12 MGEX Wheat closed at USD8.71 1/4, up 7 1/4 cents. The IGC estimated the 2012/13 global wheat crop at 665 MMT versus their previous estimate of 671 MMT and the USDA's 672 MMT. Russian production was cut 6 MMT to 49 MMT, some 4 MMT lower than the USDA although in line with other local estimates. Local analysis group IKAR said that Russia finished up exporting 27.8 MMT of grain in 2011/12. Many private estimates now suggest that that figure could halve in 2012/13. The USDA cut spring wheat crop ratings from 77% good/excellent to 71%, still a pretty high percentage. They said that 73% of the spring wheat crop is heading, the five year average is only 35%, so maturity is well advanced. The winter wheat harvest is now pegged at 69% done versus 59% last week and 43% for the 5 year average.