Chicago Closing Comments - Post USDA

10/04/13 -- Soycomplex: For soybeans the USDA's WASDE report contained both a few bearish and bullish elements. US 2012/13 ending stocks were left unchanged at 125 million bushels, contrary to the average trade guess for an increase to 137 million. However, both Brazilian and Argentine soybean production were also left unchanged from last month, with the trade expecting cuts to both. World ending stocks, which were expected broadly unchanged from last month's 60.2 MMT were raised to 62.6 MMT, with increases for both Brazil and Argentina. Chinese imports were cut 2 MMT to 61 MMT. The US. soybean crush for 2012/13 was increased 20 million bushels to 1.635 billion. US soybean exports were also raised, but only fractionally (up 5 million bushels to 1.35 billion) considering that there was already more than 98% of the March estimate on the books. In other news Lanworth Inc trimmed their forecast for US 2013/14 soybean production slightly from 3.455 billion bushels to 3.380 billion. They cut their Argentine soybean crop estimate to 49.0 MMT versus a previous estimate of 50.5 MMT. They increased output in Brazil to 81.7 MMT from a previous estimate of 81.1 MMT. Trade estimates for tomorrow's weekly export sales report for beans are 500-800 TMT. May 13 Soybeans closed at USD13.92 3/4, down 2 3/4 cents; Jul 13 Soybeans closed at USD13.67 1/2, down 3 3/4 cents; May 13 Soybean Meal closed at USD392.90, down USD1.90; May 13 Soybean Oil closed at 50.03, up 5 points. Funds were estimated as being net sellers of 3-5,000 soybean contracts on the day.

Corn: It was a very choppy session for corn, which traded both sides, weighed down a little by wheat which was sharply lower for much of the day. The outstanding number for corn was the USDA raising US 2012/13 ending stocks by nowhere near as much as the trade expected, coming out with an estimate of 757 million bushels versus the average trade guess of 824 million. World ending stocks however came in well above expectations of 120.2 MMT at 125.3 MMT. Brazilian production was raised more than anticipated to 74.0 MMT and Argentine output was left unchanged at 26.5 MMT versus the cut to 25.7 MMT that the trade was expecting. The USDA also increased domestic demand from the ethanol sector by 50 million bushels, despite the fact that usage has been lagging in 2013. They clearly believe that lower prices will stimulate demand. Right on cue to back that theory up the Energy Dept today pegged weekly ethanol production at 854,000 barrels/day, up sharply on 807,000 bpd from last week and the highest weekly total since June 2012. This also beat the level required to hit the USDA's March target of 4.5 billion bushels of corn going to feed the ethanol sector in 2012/13. Lanworth Inc increased their forecast for US corn crop in 2013/14 to 13.72 billion bushels from a previous estimate of 13.64 billion. They cut their Brazil corn crop estimate to 76.0 versus a previous estimate of 76.4 MMT, and also reduced Argentina from 25.5 MMT to 25.0 MMT. Trade estimates for tomorrow's weekly export sales report are 250-500 TMT. Funds were seen as net buyers of around 7-8,000 contracts on the day. May 13 Corn closed at USD6.49, up 4 3/4 cents; Jul 13 Corn closed at USD6.32 1/2, up 5 cents.

Wheat: Today's USDA data was most bearish for wheat, raising world ending stocks to 182.3 MMT versus the average trade guess of 178.6 MMT and 178.2 MMT last month. Via a bit of creative accounting 3 MMT of this extra 4 MMT came courtesy of increases to the 2011/12 carryout. US ending stocks were raised in line with expectations and US export potential was left unchanged. EU-27 and Australian wheat exports were both raised 1 MMT each to 20.5 MMT and 17.5 MMT respectively. China's feed wheat usage was cut 3 MMT, increasing their ending stocks by a similar amount. Elsewhere, the Kazakhstan Ag Ministry said that the country had exported 5.2 MMT of grain between July 1st and April 1st versus 8.3 MMT a year ago, adding that they may export a further 2 MMT between now and the end of the season. India’s April 1st wheat stocks were said to be 24.2 MMT versus a government target of only 4.0 MMT. New crop harvesting there is now underway, with a record or near record crop anticipated. Now that the USDA report is out of the way the market will switch back to eyeing new crop prospects in the US and around the world. US winter wheat is under threat from a second big freeze coming to the Plains this week, whilst northern spring wheat states and the Canadian Prairies sit under a deep blanket of snow, delaying plantings there. Trade estimates for tomorrow's weekly export sales report for wheat are 3-600 TMT versus 316,000 MT last week. Funds were estimated as being net sellers of around 5,000 CBOT wheat contracts on the day. May 13 CBOT Wheat closed at USD6.96 3/4, down 12 cents; May 13 KCBT Wheat closed at USD7.30, down 16 1/2 cents; May 13 MGEX Wheat closed at USD7.84 1/2, down 15 1/4 cents.