Nogger's Blog

12/04/11 -- Soybeans: May soybeans ended 38 3/4c lower at USD13.29 3/4; May soymeal fell USD7.360 to USD342.40; May soyoil settled 158 points lower at 57.24. A broad-based commodity sell-off was the order of the day after influential player Goldman Sachs advised clients to book profits in the raw material markets. Japan's ongoing nuclear crisis, a sharply lower crude oil market and increased soybean production estimates from Brazil added to the negative tone. China is being very vocal in citing current soybean prices as being detrimental to crush margins, you wouldn't expect them to say anything less I suppose. However there is evidence that they have cut back their buying quite sharply of late.

Corn: May corn fell 23 1/2c to USD7.52 1/2; Dec corn declined 20 3/4c to USD6.36 1/2. Funds were said to have ditched 15,00-20,000 contracts today as selling kicked in across more or less the full range of commodities. Front month May corn traded at a premium to wheat at one point for the first time since 1996. All the same problems afflicting soybeans dragged corn lower too, including Goldman Sachs, Japan and crude oil. Japan was cited to have bought up to half a million tonnes of optional origin corn, although that seemed to make little difference today. Who said that speculators had nothing to do with soaring food prices?

Wheat: CBOT May wheat fell 38 3/4c to USD7.59 1/2; KCBT May lost 25c to USD8.94; MGEX May dropped 24c to USD9.11 3/4. Last night's USDA crop report showed a fall in US winter wheat crop conditions, with Kansas wheat at it's worst since 2002. Even so fund selling kicked in after Goldman Sachs recommended profit-taking on a commodity basket including corn, wheat and soybeans. A general malaise surrounded the markets today. Do Goldman really carry that much clout? It's a difficult one to call. A couple of heavy shake-outs in Feb and March have maybe got long-holders less convinced of their infallibility than they had been previously.