Chicago Positions Itself Ahead Of USDA Report

10/10/12 -- Soycomplex: Nov 12 Soybeans closed at USD15.23 1/4, down 26 3/4 cents; Jan 13 Soybeans closed at USD15.23 3/4, down 25 1/2 cents; Oct 12 Soybean Meal closed at USD470.10, down USD8.00; Oct 12 Soybean Oil closed at 50.17, down 65 points. Fund selling on beans was estimated at 9,000 contracts on the day, driving the market lower ahead of tomorrow's USDA report, as they cut back on their long position. For beans, the report is expected to be bearish with US soybean yields increasing to 37.0 bpa, from within a range of estimates of 35.5-38.5 bpa and versus the September USDA estimate of 35.3 bpa. US production is expected higher at 2.770 billion bushels from within a range of 2.600 and 2.903 billion and versus 2.634 billion last month. US 2012/13 ending stocks are also called higher than last month's 115 million bushels at 134 million. World ending stocks are seen at 53.3 MMT versus 53.1 MMT in September. In other news the USDA reported the sale of 120,000 MT of soybeans to China for the 12/13 marketing year.

Corn: Dec 12 Corn closed at USD7.36 3/4, down 5 1/4 cents; Mar 13 Corn closed at USD7.37 3/4, down 4 1/2 cents. Funds were said to have been net sellers of 6,000 corn contracts on the day, again cutting their length ahead of the USDA report, despite expecting it to be bullish for corn. The report is expected to show little change on US corn yields from last month, with the average trade estimate coming in at 122.7 bpa, from within a fairly wide range of estimates of 119.9–127.0 bpa. The September USDA estimate was 122.8 bpa. Corn production however is expected lower by virtue of an anticipated reduction in harvested area. The average trade estimate is 10.598 billion bushels, from within a range of estimates of 9.954–11.194 billion and versus the September USDA estimate of 10.727 billion. A Reuters survey sees US 2012/13 corn ending stocks falling to a 17 year low of 648 million bushels. World carryout is also seen falling, to 121.322 MMT. The wide disparity between the low end of US yield and production estimates and the top end appears to set corn up to potentially react with most volatility tomorrow.

Wheat: Dec 12 CBOT Wheat closed at USD8.69 3/4, up 5 1/2 cents; Dec 12 KCBT Wheat closed at USD8.97 1/2, up 8 3/4 cents; Dec 12 MGEX Wheat closed at USD9.33 3/4, up 5 3/4 cents. Funds were seen ending the day as modest buyers in Chicago wheat, taking a net 2,000 contracts on the day. For wheat, tomorrows report is expected to be supportive with US 2012/13 ending stocks seen at 627 million bushels, from within a range of estimates of 550-714 million and 71 million below the September USDA estimate of 698 million. World wheat carryout is also seen falling to 172.813 MMT, from within a range of estimates of 167.4-177.3 MMT and versus the September USDA estimate of 176.71 MMT. Australia's crop will surely be reduced from last month's 26 MMT. US winter wheat is in need of moisture ahead of winter dormancy in many areas, with emergence running significantly behind schedule at 23%. In the week ahead "significant dryness will continue in the west central Plains, namely NE, northern KS, and northern CO," according to MDA CropCast. Russian activity in the world wheat export market seems to have tailed off sharply, although US wheat is still to expensive into many homes versus EU and Argentine origins.