Chicago Closing Comments - Friday Night

01/08/14 -- Soycomplex: Beans closed lower across the board, with the heaviest losses in new crop months, on forecasts for drenching rains for large parts of the US Midwest to develop across the weekend and last into next week. This wetter forecast, coupled with the arrival of a new month prompted some fairly heavy fund selling - estimated at around 12,000 contracts in beans, plus a further 4,000 in meal. The differential between the Aug and Sep 14 soybean contracts has now widened to over $1.40, as the latter heralds in the arrival of new crop. Private analyst Linn Group pegged 2014 US soybean yields at 45.8 bu/acre, estimating production at a record 3.849 billion bushels. The USDA were at 45.2 bu/acre and 3.8 billion bushels in their July WASDE report. Informa Economics are due out next week with their revised estimates, before the USDA themselves on Aug 12. The Buenos Aires Grains Exchange said that the 2013/14 Argentine soybean harvest is finally complete They left their production estimate unchanged at a record 55.5 MMT. Tonight's Commitment of Traders Report shows managed money finishing the week through to Tuesday night as net buyers of just over 10,000 contracts, giving them a modest net short position of 8,319 lots. Monday night's USDA crop progress report is expected to maybe show a small decline in the percentage of this year's crop rated good/excellent. Last week's report showed a 2 point drop week on week to 71% good/excellent - but still the highest rating since 1994 heading into August. A further 2 point drop isn't going to hurt too much, especially if the forecast rains arrive. Aug 14 Soybeans closed at $12.15, down 9 1/2 cents; Nov 14 Soybeans closed at $10.58 1/2, down 23 1/2 cents; Aug 14 Soybean Meal closed at $387.50, down $3.80; Aug 14 Soybean Oil closed at 35.45, down 66 points. For the week that puts front month beans virtually unchanged - up 3 2/4 cents, although meal was down $10.50 and oil fell 64 points to levels not seen since 2009.

Corn: The corn market closed with losses of around 4-5 cents. Next week's wetter forecast is also seen as being beneficial to corn, although perhaps maybe to a lesser extent than soybeans. Temperatures are also expected to trend a little warmer, which won't do any harm either. Confidence in a record-breaking 170+ bu/acre yield this year is growing with every passing day. Linn Group estimated US corn production at 14.518 billion bushels with an average national yield of 172.8 bu/acre today. Both figures would be records. Doane came out with production at 14.440 billion bushels with an average yield of 172.3 bu/acre this week. The USDA's estimates for once look conservative, with yields left unchanged at 165.3 bu/acre and production at 13.86 billion bushels last month. They did however hint at a possible rise on those figures come the August report, saying "for much of the crop, the critical pollination period will be during middle and late July." That period is now over, with seemingly little, or no, damage done. The USDA cut corn crop ratings by one point to 75% good/excellent last week, a 1-2 point drop might be on the cards again on Monday. Again, as with soybeans, these numbers are amongst the highest on record for this time of year, so a small decline won't hurt too much. In their weekly crop report, the Buenos Aires Grains Exchange said that the Argentine rain-dogged corn harvest was now 80% complete, up 7 points in a week, although the harvest there was finished a year ago. They left their production estimate unchanged at 25 MMT, a 7.4% decline on last year. The latest Commitment of Traders Report shows managed money cutting their net corn long for the week through to Tuesday night to just over 63,000 lots. Sep 14 Corn closed at $3.52 1/2, down 4 1/2 cents; Dec 14 Corn closed at $3.62 1/4, down 4 3/4 cents. For the week that puts Sep 14 corn 10 1/2 cents lower, the lowest level for a front month since June 2010.

Wheat: The wheat market closed flat to 7 cents higher across the three exchanges. Chicago and Kansas wheat were little changed on the week, and Minneapolis was lower. The latter remains under particular pressure on the outlook for a good US spring wheat crop this year. Widespread quality concerns in Europe give rise to ideas that US wheat might pick up a bit of extra international interest, even if it has to wait a while for the initial glut of cheap Russian wheat to be absorbed onto the market. Russia are said to have exported a record volume of grain in the month of July - 2.9 MMT according to Rusagrotrans. The previous record volume shipped out in the month of July was 2.5 MMT in 2011. That's the highest start ever for the first month of a new marketing year. There's talk that the toughening of Western sanctions against Russia may only serve to speed up sales in the early part of the marketing year as a "let's get it out while we can" mentality kicks in. The Buenos Aires Grains Exchange said that the Argentine 2014/15 wheat crop is 91.3% planted, on 3.83 million of the anticipated 4.2 million hectares. That's already better than the final planted area of 3.62 million ha last year. If they do get their intended 4.2 million ha into the ground then that would represent a 16% rise versus 2013. Dr Cordonnier said that Brazilian growers may not plant as large a wheat area as was originally expected due to adverse weather conditions and lower domestic prices. CONAB's current forecast is for a 33% hike in Brazil's 2014/15 wheat production to 7.4 MMT. They are the largest wheat importer in South America and the third largest in the world after Egypt and Indonesia. The latest Commitment of Traders Report shows managed money adding almost 7.5k contracts to their overall net short position in Chicago wheat. Their new short as of Tuesday night is almost 72k lots. Sep 14 CBOT Wheat closed at $5.34 1/4, up 4 cents; Sep 14 KCBT Wheat closed at $6.32 3/4, up 7 cents; Sep 14 MGEX Wheat closed at $6.16, unchanged. For the week CBOT wheat was down 3 3/4 cents, Kansas rose 1 1/2 cents and Minneapolis was down 11 3/4 cents.