Chicago Grains Crash

28/01/15 -- Soycomplex: Beans closed lower, and soyoil tumbled to its lowest levels since March 2009 on news that the EPA had agreed to allow Argentine soyoil to qualify for the US biofuel credit program. The US National Biodiesel Board (NBB) said that this move will open the floodgates for South American biofuel manufacturers. Meal actually closed a little bit higher, I guess the reasoning behind that is if US crushers see reduced demand for oil then there will be less meal produced. Oil World were said to have estimated this year's Brazilian soybean crop at 89-93 MMT. Most other analysts are in the 93-95 MMT range. Heavy January rainfall in Argentina is seen boosting soybean production there. Weather conditions are remarkably similar this season to the previous record production year of 2009/10, said Martell Crop Projections. "All 3 leading soybean provinces Cordoba, Buenos Aires and Santa Fe have received above normal rainfall this month, similar to January 2010. Strong cooling and somewhat drier weather is predicted to close out the month, a favourable forecast for developing soybeans, as field moisture is abundant from previous heavy rainfall," they said. Trade estimates for tomorrow's weekly export sales report are expected to show a drop off in demand for US beans and only total around 300-400 TMT. Mar 15 Soybeans closed at $9.70 1/4, down 3 1/2 cents; May 15 Soybeans closed at $9.77 1/4, down 4 cents; Mar 15 Soybean Meal closed at $337.40, up $0.80; Mar 15 Soybean Oil closed at 30.34, down 83 points.

Corn: The corn market closed with some hefty losses. The news regarding the EPA decision to allow Argentine biodiesel to be eligible for entry to the US biofuel credit program was seen as bearish for demand for US corn. "The market expects Argentine processors to export an additional 10 – 20,000 MT of biodiesel a month April forward. The volume doesn’t seem significant enough to have any nearby pressure to the market. However it does add a competitor to the domestic market and sets precedent for further imports," said Benson Quinn. The US Energy Dept reported US ethanol production at 979,000 barrels/day this past week, up 1,000 bpd from a week ago. Ethanol stocks rose to a two year high. WTI crude closed below $45/barrel. Ukraine corn was said to have traded at $173/tonne FOB, down $2/tonne from trade reported yesterday, and is taking business from US origin corn into Asia. Trade estimates for tomorrow's weekly export sales report for corn are around the 1 MMT mark. Mar 15 Corn closed at $3.73 1/4, down 8 cents; May 15 Corn closed at $3.81 1/2, down 8 1/4 cents.

Wheat: The wheat market closed with double digit losses. Chicago wheat has now closed lower for 15 of the last 16 trading sessions, and on the other occasion it was only unchanged! The Chicago market now seems to be lining up to test the $5/bushel mark. We haven't seen a front month trade that low since early October. Sharp declines in EU wheat prices today added to the bearish tone for US wheat that is already losing market share to Europe. The USDA attaché in Argentina estimated the country's recently harvested wheat crop at 12.5 MMT versus the official USDA estimate of 12.0 MMT. They will be taking business of US wheat into Brazil this year. Taiwan are tendering for 86,280 MT of US wheat for March–April shipment. Other than that most of the international tenders kicking around are likely to be filled by other origins. Trade estimates for tomorrow's weekly export sales are a modest 300-450 TMT. Mar 15 CBOT Wheat closed at $5.05 1/4, down 13 3/4 cents; Mar 15 KCBT Wheat closed at $5.35 3/4, down 14 1/2 cents; Mar 15 MGEX Wheat closed at $5.55, down 11 1/2 cents.