Chicago Leaps Despite USDA Data Being Mixed

11/10/12 -- Soycomplex: Nov 12 Soybeans closed at USD15.48 1/2, up 25 1/4 cents; Jan 13 Soybeans closed at USD15.48 1/2, up 24 3/4 cents; Oct 12 Soybean Meal closed at USD482.70, up USD12.60; Oct 12 Soybean Oil closed at 50.88, up 71 points. Funds were estimated to have bought 15,000 bean contracts on the day. There was something for both the bulls and the bears in the USDA numbers. US plantings were increased and so too were yields, from 35.3 bpa last month to 37.8 bpa this time round, some 0.8 bpa above the average trade guess. That took production up to 2.86 billion bushels versus 2.634 billion last month and the average estimate of 2.77 billion. Despite that, a sharp increase in exports - from 28.7 MMT to 34.4 MMT - saw ending stocks come in lower than anticipated at 130 million bushels, or 3.5 MMT. China's import requirement was increased from 59.5 MMT to 61.0 MMT. No changes in output were forecast for Brazil, Argentina or any of the other more minor South American producers. World ending stocks were increased more than expected to 57.6 MMT. China only sold 225 TMT of the 400 TMT of soybeans put up for auction today. Estimates for tomorrow's weekly export sales report for beans are a healthy 700-900 TMT, last week's sales were a huge 1.3 MMT you may recall. The USDA's revised export figure means that existing commitments as of last week meet 68% of the new target just four weeks into the season.

Corn: Dec 12 Corn closed at USD7.73 1/4, up 36 1/2 cents; Mar 13 Corn closed at USD7.73 1/4, up 35 1/2 cents. Funds were given credit for being net buyers of around 25,000 corn contracts on the day. The USDA placed corn yields at 122 bpa, 0.7 bpa below the average trade estimate. Despite that, an increase in planted area helped keep production virtually unchanged from last month at 10.7 billion bushels, 108 million above the average trade guess. World production was lowered 2 MMT, most of that coming from another downgrade for Europe. The bullish surprise came from US ending stocks cut 114 million bushels from last month to 619 million, 26 million below the average trade estimate, giving the tightest stocks to usage ratio in almost 40 years. World ending stocks came in at the lower end of trade estimates at 117.3 MMT - of which 60 MMT is said to be in China. Tomorrow's weekly export sales report will be interesting, with the trade expecting corn sales of 300-425 TMT. Last week's fairly modest sales of 326,900 MT were in fact the highest in 20 weeks.

Wheat: Dec 12 CBOT Wheat closed at USD8.86, up 16 1/4 cents; Dec 12 KCBT Wheat closed at USD9.18, up 20 1/2 cents; Dec 12 MGEX Wheat closed at USD9.46 3/4, up 13 cents. Fund buying in CBOT wheat was estimated at around 5,000 contracts on the day. The USDA lowered the world wheat crop 5.7 MMT from last month to 653 MMT, more than 6% down on last year. US exports were dropped 1 MMT to 31.5 MMT. Despite a drop of 1 MMT in production from last month, Russia's export potential was raised 1 MMT to 9 MMT. India's new found emergence as a global wheat exporter saw it's foreign sales projected 1 MMT higher than last month at 6 MMT, making it the world's eight largest wheat seller in 2012/13. Support for wheat futures came from the tight domestic corn situation in the US, fostering ideas that wheat feeding may end up much more prevalent than normal this year. The Buenos Aires Cereals Exchange estimated Argentina’s wheat crop at 10.12 MMT versus 13.2 MMT in 2011/12. The USDA has them down to produce 11.5 MMT this year. As well as cuts for Australian and Canadian wheat, barley output in both countries was also downgraded. Trade estimates for tomorrow's weekly export sales report are 300-500 TMT.