Nogger's Blog

12/05/11 -- The overnight grains closed sharply lower in follow through action from yesterday and what looks like another wave of broad-based commodity selling as the end of US QE2 approaches. Wheat ended 15-20c lower, with corn down 10-17c and soybeans falling 17-19c.

Crude is almost two and a half dollars lower and now well beneath USD100/barrel after yesterdays bearish stocks data. US crude supplies rose by 3.8 million barrels last week the US Energy Dept said yesterday, more than double what the market was expecting.

Other energies, metals and softs are also mostly lower whilst the dollar is higher.

China's central bank have increased it's bank reserve requirements again, this time by another 50 basis points. That may hurt commodity demand in general from the world's second largest consumer.

The USDA's bearish production and stocks data released yesterday continues to hang over the grains markets. Soybean bulls were hoping for a ray of light from today's weekly export sales numbers but they didn't get it. Weekly soybean export sales were just 59,000 MT old crop and 3,300 MT new crop.

That's the second sub-100,000 MT week in a row - a feat usually only achieved right at the end of the marketing year.

Wheat and corn export sales were better at a combined 550,500 MT and 467,500 MT respectively. Wheat shipments of of 1,026,500 MT were a marketing-year high, whereas soybean exports fell to just 180,600 MT.

Soybean sales have really hit the skids recently with China absent for a second week in a row.

There are still some bullish stories out there, especially for US wheat, but if the funds want out then the funds want out and that's the end of it we go lower.

Early calls for this afternoon's CBOT session: beans 15-20c lower, corn down 10-15c, wheat down 15-18c.