Chicago Mixed On Spread Unwinding, Profit-Taking

23/09/13 -- Soycomplex: Beans and meal closed lower for the third session in a row on further unwinding of spreads and ideas that last week's rains will have improved US crop conditions. Friday's Commitment of Traders report showed that as of September 17th Non-Commercial traders were sitting on a net long 157,211 contracts, an increase of 4,878 contracts on the week, and a fairly hefty long heading into harvest time. Weekly soybean export inspections came in at 16.793 million bushels, up sharply on 2.972 million the previous week, and seem to indicate that new crop beans are finally getting into the export pipeline. Current market year to date exports are now 21.611 million bushels versus 35.194 million a year ago, but there's plenty of time to catch up. Inspections need to average 27.3 million/week to reach the USDA’s forecast for the 2013/14 season. Chinese customs data shows that China imported 6,367,030 MT of soybeans in August, up 44.12% from a year ago Of that total the lion's share (5.11 MMT) came from Brazil, up 82.2% from a year ago. Argentina accounted for 831,634 MT, up 9.5% from a year ago. The US shipped China only 1,390 MT, down 99.65% from a year ago. For the Jan/Aug 2013 calendar year to date China has imported just over 41 MMT of soybeans, up 4.37% from a year ago They've imported 23.897 MMT from Brazil, up 20.15% from a year ago, along with 3.01 MMT coming from Argentina, down 3.79% from a year ago and 12.52 MMT from the US, down 18.62% from a year ago. After the close the USDA left good/excellent soybean crop conditions unchanged at 50%, contrary to the expected 1-2 percentage point increase, although much better than 35% a year ago. Crop development continues to lag. The USDA report showed 47% of the crop dropping leaves, versus the 5 year average of 56%. The crop is 3% harvested, they added, in line with expectations. Funds were net sellers of an estimated 2,000 soybean contracts on the day. Nov 13 Soybeans closed at USD13.07 3/4, down 7 1/2 cents; Jan 14 Soybeans closed at USD13.10 1/2, down 7 1/2 cents; Oct 13 Soybean Meal closed at USD411.10, down USD2.30; Oct 13 Soybean Oil closed at 41.97, down 12 points.

Corn: The corn market managed to close a little higher, although trading was confined to a narrow range. Dec 13 fell below USD4.50/bu at one stage, but managed to finish above that level at the close, although the daily trading range was less than 7 cents. Unwinding of long beans/short corn positions may have been a feature. There might also have been some profit-taking triggered at USD4.50/bu. Friday's Commitment of Traders report showed that, as of September 17th, Non-Commercial traders were net short 62,354 contracts, an increase of 34,656 contracts for the week. The USDA announced the sale of 197,200 MT of US corn to Mexico for 2013/14 delivery. South Korea bought 68 TMT of optional origin corn for Feb shipment. Chinese customs data shows that they imported only 10,638 MT of corn in August, down 98.23% from a year ago. That takes the calendar year to date total for Chinese corn imported to only 1,605,313 MT, down 56.92% from a year ago. The Russian corn crop is 10.5% harvested at 1.2 MMT, according to the Ag Ministry there. Weekly corn export inspections came in at 17.916 million bushels versus 20.118 million the previous week. That takes the 20131/4 marketing year to date total to 46.270 million bushels versus 62.466 million this time last year. After the close the USDA raised their corn good/excellent ratings by 2 percentage points from last week to 55%. That's well ahead of only 24% this time last year. They said that 91% of the crop was dented, up 10% from a week ago, and 40% is now mature versus 22% a week earlier but well behind 86% a year ago. The crop is 7% harvested versus 16% for the 5-year average and 4% a week ago. The US weather forecast for the week ahead is dry, conducive for good harvest progress to be made. Dec 13 Corn closed at USD4.53 1/4, up 2 1/4 cents; Mar 14 Corn closed at USD4.66, up 2 1/4 cents.

Wheat: Wheat was mixed, 1 cent lower to around 7 cents higher. Short-covering may have been a feature in Chicago where the Commitments of Traders report, as of September 17th, shows Non-Commercial traders were net short 52,798 contracts, an increase of 3,644 contracts for the week. Seasonal factors point higher in wheat. China's CNGOIC estimated the country's 2013/14 wheat imports at 7.5 MMT, up 1 MMT on their previous forecast but 2 MMT lower than the USDA. It is thought that Chinese buying already exists for around 3.7 MMT from the US, 2.2 MMT from Australia, 295 TMT from Canada and 220 TMT from France. That would leave them with only around 1 MMT still to buy. Argentine wheat areas are still dry. Their crop is getting smaller and there's some talk that the very low levels of carryover from 2012/13, and potentially a wheat crop of less than 10 MMT this year, will mean some form of export restrictions again on wheat out of Argentina in 2013/14. That could leave Brazil having to keep open the duty free import window on wheat longer than planned, presenting US wheat with an opportunity. They'd have to compete with EU, Canadian and Australian wheat for the business though. Canada are expected to have their best wheat crop in 20 years due to ideal weather. ABARES have Australia's wheat crop 11% higher this year, and production in the EU is also on the increase. After the close the USDA said that this year's US spring wheat crop is 93% harvested, in line with the 5-year average. They have winter wheat planting at 23% done versus 24% normally. Weekly export inspections came in at 42.319 million bushels versus 46.464 million the previous week. The 2013/14 marketing year to date total is now 462.8 million versus 331.26 million a year ago. Dec 13 CBOT Wheat closed at USD6.53 1/2, up 7 1/4 cents; Dec 13 KCBT Wheat closed at USD6.97 3/4, up 5 cents; Dec 13 MGEX Wheat closed at USD6.98 3/4, down 1 cent.