Chicago Reverses Most Of Tuesday's Gains
23/01/13 -- Soycomplex: Mar 13 Soybeans closed at USD14.37, down 14 3/4 cents; May 13 Soybeans closed at USD14.26 3/4, down 12 1/2 cents; Mar 13 Soybean Meal closed at USD416.50, down USD5.10; Mar 13 Soybean Oil closed at 52.03, down 40 points. The soycomplex gave up most of yesterday's gains in a holiday delayed "turnaround Tuesday" style. Funds were estimated to have sold 5,000 of the 6,000 soybean lots they bought yesterday in a swift change of heart. Exactly why that should be is difficult to quantify, South American weather forecasts don't look much different today than they were yesterday. We've still got below normal rainfall for Argentina and southern Brazil and above normal for northern Brazil. Agro Consult estimated Brazil’s soybean crop at 84.0 MMT, unchanged from previous estimate although 1.5 MMT more than the USDA. Celeres said that as of Jan 21st the Brazilian soybean harvest was 2% complete. There's trade rumour that China is looking for beans for Feb/Mar shipment. The gossip suggests that they may be looking to the US to supply their requirements as there's already talk of port congestion in Brazil. The normal USDA weekly export sales report is delayed to Friday due to the MLK Day holiday on Monday. Soybean sales and shipments could well exceed 1 MMT again.
Corn: Mar 13 Corn closed at USD7.20 3/4, down 7 3/4 cents; May 13 Corn closed at USD7.22 3/4, down 7 1/2 cents. Fund net selling in corn was estimated at 7,000 lots on the day. Agro Consult estimated Brazil’s 2012/13 corn crop at 74.7 MMT, unchanged from previous estimate and 3.7 MMT more than the USDA's 71 MMT forecast. The weekly US ethanol production report comes out tomorrow, last week's output at 784,000 barrels per day was the lowest weekly total since they starting issuing data in mid-2010. Ethanol margins are very poor at the moment and more plants are being mothballed because of it, reducing demand for corn from that sector. US exports are also very slow, highlighted yet again by another poor export inspections number released on Tuesday. Last week's weekly export sales of 393,300 MT just about managed to beat the level required to hit the USDA's recently reduced export target for the season of 26 MMT. That was the first time that has happened in eight weeks. Trade estimates for this week's one day delayed export sales report will be released tomorrow, expect these to be in the 250-450 TMT range.
Wheat: Mar 13 CBOT Wheat closed at USD7.74 3/4, down 4 1/2 cents; Mar 13 KCBT Wheat closed at USD8.30 1/4, down 1/2 cent; Mar 13 MGEX Wheat closed at USD8.60 1/2, down 3 3/4 cents. Fund selling in Chicago wheat was estimated at around 2,000 contracts on the day. Wheat followed corn and soybeans lower, forecasts for some moisture relief on the parched Southern Plains added a bit of pressure. "Drought stressed winter wheat areas in the Great Plains also are expecting variable precipitation in the new forecast. Farms in northern Oklahoma and south-central Kansas stand to get 0.50 to 1 inch of rainfall. These are the driest areas of the bread-basket. Less than 40% of normal rainfall has occurred over the past 90 days. Other areas of the wheat belt may miss out. Little if any precipitation is projected for the Texas panhandle and southwest Kansas," say Martell Crop Projections. The Kazakhstan Ag Ministry estimated their 2012/13 grain exports at 7.0 MMT versus a previous estimate of 8.0 MMT and down 42% on 12.1 MMT last season. There's continued talk of Russia waiving wheat import duties, although their PM has denied that this will happen.