Chicago Closing Comments - Thursday

04/10/12 -- Soycomplex: Nov 12 Soybeans closed at USD15.51 1/2, up 19 3/4 cents; Jan 13 Soybeans closed at USD15.51, up 18 3/4 cents; Oct 12 Soybean Meal closed at USD470.80, up USD5.30; Oct 12 Soybean Oil closed at 51.00, up 67 points. Beans were overdue a corrective rally, and got one courtesy of a selection of friendly news. Weekly export sales of almost 1.3 MMT comfortably beat trade expectations of around 750-900 TMT. Actual shipments of nearly 1.2 MMT were also very strong, the best total in 37 weeks. Both numbers take the 2012/13 marketing year to date commitments to nearly 23.5 MMT, almost 82% of the USDA's target for the full season only four weeks into it. China took a million tonnes of this week's sales despite being on holiday, clearly taking advantage of the recent sharp dip in prices. Stats Canada surprised the trade by estimating rapeseed production there 2 MMT below the USDA at 13.4 MMT. The Buenos Aires Cereals Exchange estimated Argentina’s 2012/13 soybean area at 19.7 million hectares, up 4.5% from a year ago. Michael Cordonnier estimated Argentina's 2012/13 soybean crop at 55-57 MMT vs. 41.0 MMT in 2011/12. Brazil's crop is seen at 81–83 MMT versus 66.5 MMT in 2011/12. The total South American crop he estimates at 147.6–154.4 MMT, compared with 115.0 MMT in 2011/12, an increase of more than a third. All in all there's little change to the fundamental outlook for soya. We have very strong world demand, particularly from China, and only one seller - the US. The supply cavalry are coming, but they're 4-6 months away yet, let's hope that they don't get cut off at the pass. If the US was to keep selling at this week's rate then they'll have hit the USDA's target for the whole of 2012/13 four weeks from now.

Corn: Dec 12 Corn closed at USD7.57, up 1/4 cent; Mar 13 Corn closed at USD7.57 1/4, down 1/4 cent. Weekly export sales of 326,900 MT were better than last week, but then again they could hardly have been worse. At least that fell within the range of trade estimates of a modest 200-400 TMT, which isn't very much at this time of year. This takes total commitments for 2012/13 to only 10.4 MMT versus 15.8 MMT at this time last year. Ag Resource came out with a 2012 US corn production estimate of 10.225 billion bushels with a yield of 119 bpa versus the USDA's 10.727 billion bushels and 122.8 bpa. Informa are out with their revised estimates tomorrow ahead of the USDA themselves next Thursday. MDA CropCast cut their EU-27 corn production estimate by 2 MMT to 53.6 MMT, almost 11% down on last year. Michael Cordonnier estimated the Brazilian corn crop at 72-73 MMT versus 72.5 MMT in 2011/12. He placed the Argentine corn crop at 26-27 MMT versus 21.0 MMT in 2011/12. MDA CropCast said 70.4 MMT and 27 MMT respectively. The Buenos Aires Cereals Exchange estimated Argentina’s corn area at 3.4 million hectares, down 12% from a year ago. The FAO estimated the 2012/13 world corn crop at 855 MMT versus 884 MMT in 2011/12. US Grains Council said that China has enough corn to meet demand but may import for stocks, saying that China's 2012 corn output could beat 2011's record production by 5-6 MMT. The USDA currently have China down to produce 200 MMT of corn this year, with a domestic consumption of 201 MMT and reserves of 60 MMT.

Wheat: Dec 12 CBOT Wheat closed at USD8.69 1/4, down 3 3/4 cents; Dec 12 KCBT Wheat closed at USD8.86 3/4, down 4 1/4 cents; Dec 12 MGEX Wheat closed at USD9.26 1/4, down 3 1/2 cents. US wheat came a poor third to EU and Argentine origins in yesterday's Egyptian tender. Weekly export sales for US wheat came in below the 400-600 TMT expected at 307 TMT, bringing 2012/13 year-to-date commitments to just over 13 MMT, or 40% of the USDA's target for the full season versus 55% normally. Sales now need to average 555 TMT a week to achieve the USDA's projected 32.5 MMT of exports this season. Stats Canada estimated the wheat crop there at 26.73 MMT, slightly down on 27 MMT last time, although almost 1.5 MMT up on last year. MDA CropCast cut their estimate for 2012/13 world wheat production to 635.3 MMT, down 600 TMT from last week due to continued dryness in Australia. US wheat sales need to pick up in the second half of 2012/13, whilst it continues to find a way into traditional homes, it is still priced a little bit too dear for the likes of Egypt. It seems like Russia and Ukraine are, or will soon be, more of less sold out on wheat. However, Europe, Canada and Argentina aren't. Australia's crop may be dwindling, but 20 MMT is still 13 MMT more than domestic consumption and large carryover stocks following two record harvests in a row will still make them a force to be reckoned with on the international wheat market.