Chicago Close - New Year's Eve

Posted by Nogger - a legend in his own mind at 10:44 | Categorized as

31/12/10 -- The grain markets ended 2010 with a few fireworks of their own, in a close that pretty much typified what's gone on for most of the second half of the year. Thoughts that this week might bring a wave of year-end book squaring and profit taking were dispelled with soybeans posting 44c gains, with corn up 15c and CBOT wheat up 11c on the week as a whole. Beans hit 28 month highs, whilst corn bettered that with a 29 month high today.

Soybeans

Jan 11 soybeans closed at USD13.93 3/4, up 27 3/4 cents; Jan 11 Soybean meal closed at USD370.30, up USD4.90; Jan 11 soybean oil closed at 57.74, up 113 points. Front month beans have gained 34% this year, with meal up 17% and oil up 46%. The years low on beans was USD9/bu back in June, so we've actually seen the market gain 55% since then. Concerns over production prospects in Argentina was again the main catalyst to light a fire under the bean market today. Soybean plantings there are 81% done, 10.5% behind last year's pace and private analysts are already trimming their production forecasts for 2011.

Corn

Mar 11 corn closed at USD6.29, up 13 cents; May 11 corn closed at USD6.36 1/2, up 12 1/2 cents. Front month corn is up 54% on the year and has almost doubled in price since the summer low was set following the June grain stocks report. Demand appears to be robust with corn export shipments at a marketing year high this week. Meanwhile production prospects in Argentina, the world's second largest exporter after the US, are diminishing by the day.

Wheat

Mar 11 CBOT wheat closed at USD7.94 1/4, up 9 1/2 cents; Mar 11 KCBT wheat closed at USD8.51, up 7 1/2 cents; Mar 11 MGEX wheat closed at USD8.81 1/2, up 9 1/2 cents. Front month CBOT wheat is up 47% on the year and almost double the summer low set in June. Spillover support from beans and corn pushed wheat higher in the last trading session of the year. Dryness in Argentina isn't an issue for the wheat crop, indeed it may help harvesting pick up from 60.5% complete earlier this week. The dry US Plains may see some welcome precipitation this week, although the crop entered winter dormancy in a pretty poor state. There are concerns too for Russian and Chinese wheat.