Chicago Markets Lower On The Week

05/10/12 -- Soycomplex: Nov 12 Soybeans closed unchanged at USD15.51 1/2; Jan 13 Soybeans closed at USD15.51, also unchanged; Oct 12 Soybean Meal closed at USD474.70, up USD3.90; Oct 12 Soybean Oil closed at 50.76, down 24 points. For the week Nov 12 beans were almost 50 cents lower, Oct 12 meal was down USD12.30 and Oct 12 oil fell 142 points. The Commitment of Traders report showed funds cutting their net long position in beans by almost 17,000 contracts in the week through to Tuesday night. Informa Economics estimated US soybean yields at 37.8 bpa with production at 2.86 billion bushels. The yield estimate is 2.5bpa above the USDA's September figure, and the production number is 226 million higher than the USDA. Demand for US beans remains very strong, backed up by yesterday's weekly export sales of almost 1.3 MMT. That means that forward sales are running at a record pace of 82% of the USDA's projected full season target, almost double the normal rate. The USDA announced fresh sales of 180 TMT of US beans sold to China today. Whilst the US has the world soybean trade to itself for the remainder of 2012, it will face stiff competition from South America by the spring of 2013. The USDA's Brazilian attaché estimates the 2012/13 soybean area at 27.5 million hectares, with production seen at 82.0 MMT and 2012/13 exports at 38.5 MMT. All three would be individual records.

Corn: Dec 12 Corn closed at USD7.48, down 9 cents; Mar 13 Corn closed at USD7.48 1/2, down 8 3/4 cents; Fund selling was estimated at 8,000 corn contracts on the day. Dec 12 corn was 8 1/4 cents lower on the week, with Mar 13 down 11 cents. Outside markets were a negative influence with crude oil falling back below USD90/barrel on global economic concerns adversely affecting demand. Informa placed US corn yields at 127 bpa this year, and the crop at 11.194 billion bushels. Last month's USDA estimates were 122.8 bpa and 10.727 billion bushels. Unlike soybeans, the US has only sold 33% of the USDA's projected 2012/13 target for corn sales. In fact it's eight weeks since the US sold more corn than soybeans in the weekly sales report. That doesn't look like changing too dramatically any time soon, with South American corn offered at USD40-50/tonne cheaper than US corn. Indeed, Brazilian corn is now being successfully imported into the US by several large feed operations. Michael Cordonnier yesterday estimated the Brazilian corn crop at 72-73 MMT versus 72.5 MMT last year and the Argentine corn crop at 26-27 MMT versus 21.0 MMT. So competition from that region looks set to continue throughout 2012/13. Harvest pressure remains, with a record 70% of the US corn crop likely to be in the barn by Sunday night, up from 54% a week ago.

Wheat: Dec 12 CBOT Wheat closed at USD8.57 1/2, down 11 3/4 cents; Dec 12 KCBT Wheat closed at USD8.78 3/4, down 8 cents; Dec 12 MGEX Wheat closed at USD9.19 1/2, down 6 3/4 cents. On the week Chicago wheat was 49 cents lower, with Kansas wheat down 48 3/4 cents and Minneapolis losing 39 cents. The USDA attaché in Australia fell into line with just about everybody else (except the USDA themselves), placing the wheat crop there at 21 MMT - the USDA will surely change their forecast of 26 MMT next week? The Commonwealth Bank of Australia forecast wheat exports the at 17.8 MMT in 2012/13 versus 24.9 MMT in 2011/12 and the ABARES estimate of 21.5 MMT and the USDA's 21.0 MMT. Russia's Grain Union head said that the country may export 15 MMT of grains in 2012/13, a bit more than the official Ministry estimate of 10-14 MMT. Around 7.5 MMT of that has already been shipped, according to the Grain Union. Russia's Deputy Minister of Agriculture said that the government may begin selling off some of it's grain intervention fund at the rate of 100 TMT/week starting on Oct 23 and lasting through to the end of the year. Potentially that would mean releasing 1 MMT of the 5 MMT currently held onto the market, double the amount originally suggested. The move is aimed at stabilising rapidly rising domestic prices. Ukraine said it had harvested almost 35 MMT of grain off 83% of the planned area, with corn harvesting almost at the halfway point.