Chicago Closing Comments Thursday Night

03/10/13 -- Soycomplex: Beans extended their mini rally from 19 month lows set earlier in the week, without the aid of the usual weekly export sales data from the shutdown USDA. The trade is trying to decide if Tuesday was the oft seen "October low" or if there is more downside on further harvest pressure to come yet this month. Rain is seen slowing the US harvest this weekend, although anecdotal reports still suggest significantly better yields from many had anticipated. At this stage it looks unlikely that we will get a harvest progress/crop condition report from the USDA on Monday night and next Friday's WASDE report would also appear to be in jeopardy. Strong Asian buying of meal in recent days is supporting that market. Europe are also said to have been buying US meal. Ideas are that a punitive import tax on EU biodiesel imports from Argentina will lead to a reduced crush (and therefore lower supplies of meal) by the world's largest soymeal exporter. The beans will still be there though, and they will be crushed somewhere, quite possibly here in Europe where there will also be increased supplies of rapemeal as a spin off of increased rapeseed usage to fuel biodiesel production here. The Philippines bought 40 TMT of US soymeal for Jan shipment and are said to be looking for more. Stats Canada are tomorrow expected to report a record large canola crop there this year. Nov 13 Soybeans closed at USD12.88 1/4, up 14 1/2 cents; Jan 14 Soybeans closed at USD12.89, up 13 1/4 cents; Oct 13 Soybean Meal closed at USD427.80, up USD10.20; Oct 13 Soybean Oil closed at 40.01, up 89 points.

Corn: The corn market was once again little changed in a narrow trading range. As with beans, rain is seen disrupting harvest activity this weekend, but yields "better than expected" keep getting reported back from what has been picked so far. The Buenos Aires Grains Exchange estimated Argentina's 2013/14 corn planted area at 3.46 million hectares versus a previous estimate of 3.56 million due to dryness. Taiwan's MFIG bought 60 TMT of Brazilian corn for Nov/Dec shipment. Whilst the USDA remain shutdown, Informa Economics are due out tomorrow with their latest US crop production estimates. For corn last time they had production at 13.889 billion bushels versus the USDA's September estimate of 13.843 billion. They had US corn yields estimated at 157.6 bus/acre versus the USDA's September estimate of 155.3 bu/acre. Progress is slow with the Ukraine and Russian corn harvests, with the first snows of the winter being reported in Ukraine yesterday. The trade is trying to get to grips with whether corn is under-priced or wheat is over-valued. Current differentials are the widest in three years. The large fund short in corn also appears to be underpinning the market and should encourage buying on any price breaks. Seasonally though, the low in the corn market often doesn't come in until a bit later in the year, often in December. Dec 13 Corn closed at USD4.39 1/4, up 1/4 cent; Mar 14 Corn closed at USD4.52, up 1/4 cent.

Wheat: Wheat closed with modest gains on all three exchanges. There was no weekly export sales data from the USDA to underscore that demand for US wheat remains strong. The market did however get news that Brussels had issued 746 TMT of EU soft wheat export licences this past week, the largest weekly total of the season so far, reaffirming the notion that global demand for wheat is currently buoyant. It also suggests that not everybody wants the cheaper Black Sea options. Adding support was the news that the FAO cut their world wheat production forecast by 5 MMT to 705 MMT. That really is an "is the glass half full or half empty" sort of a thing as 705 MMT is still a record crop and their previous estimate of 710 MMT was the highest one out there. What the market chose to focus on though was the news that they now peg Argentina's wheat crop at only 9.5 MMT versus the USDA's September estimate of 12.0 MMT, although they aren't the only ones thinking that frost and dryness may have cut this year's production to below 10 MMT. That's potentially good news for US wheat exports to Brazil. On the flip side they left Canadian wheat production unchanged from their previous forecast of 29.2 MMT. Stats Canada may blow that one out of the water tomorrow when they release their October crop production estimates. The average trade guess for wheat is 32.9 MMT, which would more than compensate for Argentina's losses this year. Planting delays in Russia and Ukraine are adding support to a market still vulnerable to the size of the existing fund short position in Chicago wheat. Dec 13 CBOT Wheat closed at USD6.89 1/4, up 3 1/4 cents; KCBT Wheat closed at USD7.55 1/2, up 1 cent; Dec 13 MGEX Wheat closed at USD7.50 1/4, up 3 1/2 cents.