Chicago Close

07/12/10 -- Soybeans

Jan soybeans ended 3c lower at USD12.85 1/2c; Dec soymeal finished USD2.50 lower at USD343.00; Dec soyoil was 26 points higher at 53.39. A firmer dollar on ideas that more QE would be needed in 2011 to keep the US recovery afloat depressed prices heading into the year end. Crude oil hit it's best levels for more than two years, but also turned lower later in the day. Funds were estimated to have been net sellers of 3,000 soybean contracts on the day. South American crop production estimates are starting to filter through lower for soybeans on the back of adverse weather conditions.


Jan corn fell 6 1/2c, to USD5.47 1/4c; March corn declined 6 1/4c, to USD5.61 3/4c. Crude oil fell back below USD90/barrel and the dollar strengthened as the day wore on. In addition uncertainty over the renewal of the ethanol blenders tax credit is keeping the market cautious. Funds were estimated to have sold around 8,000 contracts today. Thoughts now are that at least half of eastern Australia's wheat crop will only make feed grade. That could be 10-12 MMT extra feed wheat on the market for SE Asia in 2011, which is detrimental to demand for US corn.


CBOT Dec wheat ended down 9c to USD7.43 a bushel; KCBT Dec wheat fell 4 1/4c to USD8.21 1/4; MGEX Dec wheat rose one cent to USD8.35. The gap between quality high protein wheat on KCBT and CBOT continues to widen. News emanating from Australia suggests that the world supply of quality wheat is continuing to tighten. ABARE today raised their overall all wheat production estimate to a record 26.8 MMT, but cut their export forecast by almost 2.5 MMT to 16 MMT. There is also talk of 2-3 MMT of wheat simply being abandoned as not even fit for harvesting.