Chicago Closing Comments - Friday

16/01/15 -- Soycomplex: Beans closed narrowly mixed, but with significant losses for the week. Talk of China cancelling 285 TMT worth of existing US purchases was a negative factor. This prompted the notion that demand is starting to switch to South America. There may have been an element of pre-weekend short-covering today after beans and meal both sustained some fairly heavy losses versus last Friday. It is also a long weekend in the US, with the market there closed on Monday for Martin Luther King Day. Some of the drier areas of Brazil are in for rain, if the weekend forecast verifies. "Mato Grosso is expecting near-normal rainfall this week, easing drought in the leading soybean state. High pressure is expected to drift eastward, opening the door for showers. Very dry conditions have dominated the state the past 30 days, with only 55-65% of normal rainfall occurring," said Martell Crop Projections. Argentina also is in for a shot at some good rains. "The forecast for the upcoming week is wet throughout Argentina’s grain belt, including the drier areas of Buenos Aires. Heavy soaking rain would be highly beneficial for developing corn and soybeans," they add. "This coming week’s export sales should be the last of the 'big' weekly sales for the marketing year as China slows its purchases ahead of its Lunar New Year holiday and shifts any new purchases to cheap South American offers," said Benson Quinn. That report will be delayed until Friday. Mar 15 Soybeans closed at $9.91 3/4, up 3/4 cent; May 15 Soybeans closed at $9.97 1/2, down 1 3/4 cents; Mar 15 Soybean Meal closed at $326.20, down $0.50; Mar 15 Soybean Oil closed at 33.39, up 40 points. For the week, Mar 15 beans were down 60 1/2 cents, with meal down $22.90 and oil shed 29 points.

Corn: The corn market closed with decent gains on the day, but still lower for the week. As with beans today's price action may have been tied to profit-taking on shorts ahead of the long weekend. Crude oil managed decent gains, and actually managed to finish the week higher than it began it for once. Ethanol prices were also higher today. Neither of those could be anything that you might call a key reversal of the recent downtrend though. Two US senators are said to have attached an amendment to the Keystone pipeline bill to alter the renewable fuel standard (RFS). The proposed amendment would remove corn ethanol from the RFS, and thereby hurting demand for corn. It is certainly no formality, indeed I would say it's highly unlikely, that the amendment will get passed however. There are however some reports of one or two US ethanol production plants starting to cut back on production as margins get squeezed. Things are looking pretty good for corn in Argentina where "the farm belt has received beneficial heavy rainfall the past 10-14 days, easing dryness in the top farm provinces Cordoba and Buenos Aires. Soaking rainfall comes at an ideal time for corn, now pollinating and filling grain. Cordoba crop conditions are much improved from 4 weeks ago," said Martell Crop Projections. The USDA reported 106,600 MT of US corn sold to unknown under the daily reporting system. Mar 15 Corn closed at $3.87, up 7 cents; May 15 Corn closed at $3.94 1/4, up 7 cents.For the week that still puts Mar 15 down 13 1/4 cents whilst May 15 fell 14 cents.

Wheat: The wheat market closed unchanged in Chicago, just about breaking a run of seven straight down days. Kansas and Minneapolis wheat managed small gains. All three exchanges still posted fairly sizable losses for the week though, with Chicago wheat leading the way with a weekly decline of 5.5%. Clearly the spec shorts feel more comfortable leaving their wheat position open over a 3-day weekend than they do for those of corn or soybeans. For Chicago wheat this was the lowest close on the weekly chart since the first week of November. The US dollar pushing to new highs simply isn't helping US wheat get to many international buyers, other than what you might call "very traditional" homes. Yesterday's export sales of 225,625 MT weren't great. It's been 8 weeks since the US sold more than 500,000 MT of wheat in a week, and it's been 15 weeks since we had two successive weekly sales totals higher than that amount. The US dollar has risen by 10% versus the euro during that time. Russia's new punitive export duty will be in place in two weeks time, and Ukraine look like they intend to cap wheat exports too. It's Europe that will be the most likely main beneficiary of these moves though, not US wheat. China keeps picking up the odd cargo of US wheat, but otherwise it's the usual suspects of Japan, the Philippines, Mexico and various Caribbean buyers that US wheat is left with. Mar 15 CBOT Wheat closed at $5.32 3/4, unchanged; Mar 15 KCBT Wheat closed at $5.77, up 4 cents; Mar 15 MGEX Wheat closed at $5.84 1/2, up 3 1/2 cents. For the week Chicago wheat fell 31 cents, with Kansas down 23 1/2 cents and Minneapolis 18 cents lower.