Chicago Slide Continues On Fund Selling

26/09/12 -- Soycomplex: Nov 12 Soybeans closed at USD15.73, down 38 1/2 cents; Jan 13 Soybeans closed at USD15.74 1/4, down 40 cents; Oct 12 Soybean Meal closed at USD475.10, down USD10.10; Oct 12 Soybean Oil closed at 51.65, down 144 points. This was the first close below USD16/bu for a front month on beans since early July, it was also the lowest close for front month meal since the same. Fund selling was heavy in beans at an estimated 12,000 contracts, as they continue to liquidate their long ahead of Friday's stocks report. That is expected to show US soybean inventories at the end of the 2011/12 marketing year of around 131-132 million bushels, very similar to the USDA's August estimate of 130 million, and the tightest in eight years. European economic woes are back on the front pages, adding to a bit of "risk-off" mentality. The USDA did confirm a sale of 140 TMT of US soybeans to "unknown" which barely caused a ripple against the outflowing tide of fund money. Estimates for tomorrow's weekly export sales report for beans are 650-800 TMT, against last week's 717,800 MT. The trade will be looking to see if there's any evidence of the rumoured sales to China made on this recent price dip.

Corn: Dec 12 Corn closed at USD7.24 3/4, down 19 cents; Mar 13 Corn closed at USD7.28 1/2, down 19 cents. Funds were also heavy sellers on corn, dumping an estimated 15,000 of their length ahead of Friday's USDA stocks report, maybe remembering that corn posted a limit down move last year when corn stocks came in well above trade expectations. This was also the lowest finish for a front month since early July. Reuters report that three US livestock companies in North Carolina are to import 750 TMT of Brazilian corn in 2012/13, with the first cargo due to arrive next week. The US are expected to import more corn this season than since before WWII. Demand for US corn is also taking a hit from the ethanol sector. US ethanol production fell to 809,000 barrels per day for the week ended Sep 21 - the lowest level in two months. A Minnesota ethanol plant became the latest US facility to be mothballed due to poor margins earlier this week. Martell Crop Projections say that the USDA's estimate of a record 200 MMT Chinese corn crop this year may still be too low. "Very generous rains promoted ideal growing conditions most of the summer season. A late August satellite vegetation image confirms a very high yield in the key Northeast China corn provinces," they say. Trade estimates for tomorrow's weekly export sales report are a modest 150-250 TMT against the 489,000 MT reported last week.

Wheat: Dec 12 CBOT Wheat closed at USD8.69 1/4, down 17 1/4 cents; Dec 12 KCBT Wheat closed at USD8.94 1/2, down 16 1/2 cents; Dec 12 MGEX Wheat closed at USD9.29 1/2, down 12 3/4 cents. Fund selling was placed at around 3,000 Chicago wheat contracts on the day. Egypt bought 300 TMT of French/Romanian wheat in a tender, with Us wheat proving too expensive once more. Russian wheat was also out on price and Ukraine wheat wasn't even offered. US wheat was around USD20/tonne to expensive when freight is factored in. "Drought-relieving rains have begun in the United States, the morning satellite image revealing clusters of strong thunderstorms in Kansas, Missouri and Illinois. A wet period is shaping up the next 3 days in those same areas. Kansas, Oklahoma and Texas wheat farms are expecting extremely heavy rainfall in the 3-day forecast that would increase field moisture for winter wheat planting. Tropical Storm Miriam in the eastern Pacific Ocean is expected to spread a swath of heavy moisture up into the US Southern Great Plains," say Martell Crop Projections. Trade estimates for tomorrow's weekly export sales report are 400-550 TMT, against the 489 TMT sold last week.