Chicago Closing Comments

09/04/13 -- Soycomplex: The soybean market reversed the direction of the past 10 days or so by closing with decent gains heading into tomorrow's USDA report in what looks like profit-taking and short-covering. Beans closed near the top end of the session range as funds bought an estimated 7,000 contracts on the day. CNGOIC estimated China Q1 2013 soybean imports at 11.48 MMT versus 13.27 MMT year ago due to Brazilian delay. They have full season '12/13 imports at 59 MMT versus the USDA's 63 MMT. If they're right that would be the first year on year drop in Chinese soybean imports in 9 years. CONAB cut their Brazilian soybean production estimate slightly from 82.06 MMT to 81.94 MMT. The IBGE estimated 80.9 MMT. CONAB said about 75% of the Brazilian bean crop has been harvested. Oil World estimated the Argentine bean crop at 48.5 MMT, unchanged from previous estimate and 2 MMT below the USDA's March forecast. Michael Cordonnier said that some Brazilian exporters are circumnavigating the congested ports Paranagua and Santos and shipping beans from the country's southernmost port in Rio Grande do Sul. Trade estimates for tomorrow's USDA report see 2012/13 US soybean ending stocks up from 125 million last month to 137 million. Both Brazilian and Argentine soybean production estimates are seen being trimmed slightly. World ending stocks are forecast little changes at 60.1 MMT. May 13 Soybeans closed at USD13.95 1/2, up 17 1/2 cents; Jul 13 Soybeans closed at USD13.71 1/4, up 13 1/4 cents; May 13 Soybean Meal closed at USD394.80, up USD1.50; May 13 Soybean Oil closed at 49.98, up 46 points.

Corn: The corn market also got a shot in the arm from short-covering following the recent collapse in prices with funds buying an estimated net 10,000 contracts on the day. Chinese industry analysts estimated China’s 2013/14 corn imports at a record 6-7 MMT versus the previous 2012/13 record of 5.2 MMT. CONAB estimated Brazil’s 2012/13 corn crop at 77.45 MMT, up from their previous estimate of 76.1 MMT and well above the USDA's 72.5 MMT. The IBGE estimated 74.9 MMT. UkrAgroConsult estimated the Ukraine 2013/14 corn crop at a record 21.8 MMT versus their previous estimate of 21.2 MMT. Corn exports next season were also forecast at a record 15.5 MMT versus 12.5 MMT this season. Texas corn planting is said to be 55% complete versus the 5 year average of 53%. Arkansas corn planting is 25% done versus the 5 year average of 47%. Louisiana corn planting is 97% complete. There are reports of some planting activity further north this week. In tomorrow's USDA report US 2012/13 corn carryout is expected to be raised from 632 million bushels to an average guess of 824 million, from within a range of estimates of 625-925 million. That could come via reduced US exports which are consistently lagging the level needed to hit current USDA targets. World ending stocks are forecast to rise from 117.5 MMT to 120.2 MMT. Brazilian corn production is seen increasing, although not by as much as CONAB or the IBGE estimate, from 72.5 MMT to 72.9 MMT. Argentine production may be trimmed slightly to 25.7 MMT is the average trade guess. May 13 Corn closed at USD6.44 1/4, up 10 3/4 cents; Jul 13 Corn closed at USD6.27 1/2, up 8 cents.

Wheat: The wheat market also reversed the recent trend, which in this case meant a lower close in Chicago ahead of the USDA report, even though a forecast hard freeze is on the way for parts of the Plains. The Directorate of Wheat Research in India said India’s upcoming wheat crop will be larger than the 2011/12 record crop of 94.9 MMT. Japan is tendering fro 120 TMT of US, Canadian and Australian wheat in a routine tender. Cash-strapped Egypt are said to be in negotiations with Kazakhstan to import wheat from them for the first time since 2009/10. UkrAgroConsult cut their forecast for Ukraine wheat production this year from 21.07 MMT to 20.23 MMT. The Ukraine barley crop was estimated at 7.75 MMT versus a previous estimate of 8.30 MMT. Oklahoma State University said that the US HRW wheat crop there has suffered some significant frost damage. The USDA yesterday increased the percentage of the crop rated as very poor by three points to 13%, with a further 20% rated as poor. Nationally the had winter wheat conditions 30% poor to very poor, unchanged from a week ago but well up on only 10% a year ago. There's talk of abandonment rates this year of around 25%. The Deutsche Bank forecast the average CBOT wheat price in 2013 at USD6.70 - down 22.7% from previous forecast. In tomorrow's USDA report the trade is expecting US 2012/13 ending stocks to rise from 716 million bushels to an average guess of 731 million, from within a range of guesses of 700-776 million. World ending stocks are forecast at 178.6 MMT versus 178.2 MMT last month. May 13 CBOT Wheat closed at USD7.08 3/4, down 3 3/4 cents; May 13 KCBT Wheat closed at USD7.46 1/2, up 1 1/2 cents; May 13 MGEX Wheat closed at USD7.99 3/4, unchanged.