Chicago Rises, Although Beans Finish Well Off Session Highs

23/05/13 -- Soycomplex: The soybean market raced higher early doors, only to sell-off late and close with only modest gains. An interesting situation seems to have developed in nearby July. If you're short, and haven't got the physical beans to deliver, then you need to cover in those shorts at whatever price the market dictates. If, on the other hand, you're a fund long then taking delivery of those beans isn't an option so you have to sell. There's more open interest in front month July 13 than any other, so we could see further extreme volatility in that in the weeks ahead. We also have a long weekend coming up with US markets shut for Memorial Day on Monday. Weekly export sales of 183,500 MT of old crop beans and 838,900 MT of new crop topped expectations for combined sales of 400-800 TMT. The USDA also announced the sale of 115 TMT of new crop to China under the daily reporting system. Old crop commitments are now 99.6% of the USDA target for the season. The dock workers strike at the leading Argentine port of Rosario is said to have caused a backlog of 50-100 vessels depending on which report you read. Around 80% of Argentine grain exports are shipped out of Rosario, I gather. Argentina’s Ag Ministry estimated the country's 2012/13 bean crop at 50.6 MMT versus a previous estimate of 51.3 MMT. Trade rumour suggests that the US will import around 3-4 cargoes/month of South American soybeans in the May/Jul period. Front month Jul 13 Soybeans closed at USD14.99 1/2, up 5 1/4 cents, having traded over 40 cents higher at one point; Nov 13 Soybeans closed at USD12.43, up 4 1/4 cents; Jul 13 Soybean Meal closed at USD437.00, down USD3.60; Jul 13 Soybean Oil closed at 49.66, up 2 points.

Corn: Corn also closed well off the intra-day highs, settling around 3 to 4 cents higher. Weekly export sales were 104,600 MT of old crop and 341,600 MT of new crop versus expectations of a net 200-500 TMT combined. Existing commitments are now 88% of the USDA target for the season. MDA CropCast raised their world corn production estimate by 2.7 MMT from last week due to better yield potential in the US. "Rains were rather limited early this past week, but did increase across northwestern areas later in the week. The rains once again slowed remaining planting. Rains are now easing there, which is allowing planting to improve again," they said. They now see the US 2013 crop nearly 31% higher than last year at 339.2 MMT. Strategie Grains trimmed slightly their EU-28 corn production estimate by 0.1 MMT to 66.4 MMT which is still up 15% on year ago levels. Argentina's Ag Ministry estimated their 2012/13 corn crop at 25.7 MMT, unchanged from their previous estimate. The USDA currently say 26.5 MMT. CEC estimated South Africa’s 2013 corn crop at 11.44 MMT versus a previous estimate of 11.56 MMT. Taiwan's MFIG seek 40-60 TMT of optional origin corn for August shipment. South American corn exports are in full swing. Argentina are said to have exported around 2.3 MMT of corn between May 1 – May 21. Oman bought 10,000 MT of corn from Argentina overnight. Brazilian ethanol imports look viable again with 2 vessels at the Santos port destined for the US, say Benson Quinn Commodities. Jul 13 Corn closed at USD6.62, up 3 1/2 cents; Sep 13 Corn closed at USD5.63 1/2, up 3 3/4 cents.

Wheat: For once wheat was the leader, closing higher on all three exchanges after rumour swept the floor that China were in for US SRW wheat. CBOT wheat got dragged back up above the USD7/bu mark on the strength of that on short-covering. Reports after the close suggest that they may have been enquiring, but didn't actually buy anything. Japan bought 122 TMT of the usual mixture of US, Canadian and Australian wheat in their regular weekly tender. Tunisia bought 75 TMT of optional origin wheat and 25 TMT of optional origin barley for June/July shipment. Algeria bought 400 TMT of optional origin wheat for August shipment. Weekly export sales of sales of 239,400 MT of old crop and 713,600 MT of new crop beat trade forecasts for a combined 400-700 TMT. Existing commitments stand at 97% of the USDA target for a season with only 2 weeks left to run. That includes more than 2 MMT of outstanding old crop sales, so it looks unlikely therefore that this target will be met. Argentina Ag Ministry estimated Argentina’s 2012/13 wheat crop at 9.0 MMT, unchanged from their previous estimate. MDA CropCast left their 2013 world wheat production estimate unchanged from last week, including projecting Canadian production at a record 29.7 MMT, the same figure released by Ag Canada earlier in the week. Russia's ProZerno said that they expect a grain harvest of 97 MMT this year, up sharply versus the official figure of 71.7 MMT in 2012 and even slightly higher than the 94.2 MMT produced in 2011. Jul 13 CBOT Wheat closed at USD7.03 1/4, up 14 3/4 cents; Jul 13 KCBT Wheat closed at USD7.54 1/2, up 11 1/4 cents; Jul 13 MGEX Wheat closed at USD8.13 1/4, up 5 1/2 cents.