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06/04/11 -- Soybeans: May 11 soybeans closed at USD13.76 1/2, up 3 1/4 cents; Nov 11 soybeans closed at USD13.76 1/4, down 2 1/2 cents; May 11 soybean meal closed at USD355.60, up USD2.00; May 11 soybean oil closed at 58.78, down 7 points. Beans are starting to look cheap relative to corn and wheat. Recent price action may well encourage higher spring corn plantings, and potentially lower sowings of soybeans, than last week's USDA estimates. Conab peg the Brazilian crop at a record 72.2 MMT, 2.2 MMT higher than the USDA's March number. The USDA issue revised production estimates on Friday.Corn: May 11 corn closed at USD7.63, down 3 3/4 cents; Dec 11 corn closed at USD6.47 1/2, up 3/4 cent. Corn retreated from yesterday's record highs, although only nominally. Nearby May declined as funds rolled longs out of the May and into July. The USDA announced the sale of 101,600 MT of new crop corn to "unknown". The US Grains Council say that China "could" import 2-3 MMT of corn this year to redress draw-downs on state-owned reserves. However, they do have a vested interest, and the word "could" doesn't exclude the words "might not".
Wheat: May 11 CBOT wheat closed at USD7.82 1/4, down 4 cents; May 11 KCBT wheat closed at USD9.39 1/2, down 10 1/2 cents; May 11 MGEX wheat closed at USD9.54 1/2, down 7 3/4 cents. US wheat is balancing ample old crop stocks against potential new crop yield losses. Increased demand for wheat due to the erosion of the traditional corn/wheat price differential is also supportive. Extremely poor US winter wheat conditions, and a potentially high level of abandonment this season also look like limiting downside for wheat at the moment.
