Chicago Close

19/11/10 -- Soybeans

Jan 11 soybeans closed at USD12.01 1/2, down 40 1/2 cents; Dec 10 soybean meal closed at USD325.80, down USD9.20; Dec 10 soybean oil closed at 48.96, down 196 points. News of China raising bank reserve requirements for the second time in a fortnight spooked the market. It is also the fifth increase this year, and comes at a time when 75% of all US soybean sales are heading to China as almost a matter of weekly routine. The move apparently takes more than USD50 billion of liquidity out of the Chinese market.


Dec 10 corn closed at USD5.20 3/4, down 21 cents; Mar 11 Corn closed at USD5.34 3/4, down 21 cents. The Chinese news was seen as bearish for corn, as too was news of the US Environment Agency delaying a decision on increased ethanol usage, to the so-called E15 blend, for cars built between 2001-2006 until the new year. Funds were estimated to have sold in excess of 10,000 contracts on the day taking sales for the week to around 30-40,000 contracts.


Dec 10 CBOT wheat closed at USD6.44 1/2, down 3/4 cent; Dec 10 KCBT wheat closed at USD7.09 1/2, down 3/4 cent; Dec 10 MGEX wheat closed at USD7.25 3/4, up 1 3/4 cents. Wheat managed to shrug off the Chinese news as relatively inconsequential for it. Thursday's weekly export sales were strong at almost 1 MMT, and the news that Egypt bought three cargoes of US wheat and nothing from elsewhere also highlights the competitiveness of US wheat at current levels.