Chicago Close

22/07/11 -- Soybeans: Aug 11 soybeans closed unchanged at USD13.80 1/4; Nov 11 soybeans closed at USD13.88 1/4, up 1/4 cent; Aug 11 soybean meal closed at USD363.00, up USD0.30; Aug 11 soybean oil closed at 56.51, up 3 points. Beans were hardly changed on the week with August down 5 1/2 cents and Nov up 1 1/4 cents. Aug meal was up USD2.70 and Aug oil up 16 points. The market was quiet ahead of the weekend. Having chopped this way and that all week as weather forecasts changed, we could maybe expect some fireworks on Monday morning when the Globex market opens armed with renewed weather forecasts. Large funds almost doubled their bean long position for the week ending July 19, adding almost 38,000 contracts to stand just over 78,000 net long whilst index funds are sitting on a net long of 167,000. Combined that's the equivalent of more than 33 MMT.

Corn: Sep 11 corn closed at USD6.90, up 10 3/4 cents; Dec 11 corn closed at USD6.85 1/2, up 12 1/2 cents. Despite a higher close Sep corn was 11 1/4 cents lower on the week, Dec was up a half. Some moderation in the weather outlook for next week took the shine off some off the bull's enthusiasm. "Around 65% of Midwest corn and soybeans should receive 1 inch of rain or more in the upcoming week," say Martell Crop Projections. "High pressure over eastern Canada will drive a cold front into the Midwest over the weekend which will bring some showers and thunderstorms across the Midwest with 50-60% coverage of 0.15 to 1.25," say WxRisk. What rain has fallen and Sunday night's revised forecasts for next week will decide the initial market direction on Monday. The commitment of traders report showed Large funds net long of 187,500 contracts and index funds 368,000 long, equivalent to 70.5 MMT.

Wheat: Sep 11 CBOT wheat closed at USD6.92 1/4, up 15 cents; Sep 11 KCBT wheat closed at USD7.80, up 5 3/4 cents; Sep 11 MGEX wheat closed at USD8.38 1/2, up 4 3/4 cents. CBOT wheat was down 2 1/2 cents on the week, with Kansas wheat up 15 1/2 cents and Minneapolis up 14 3/4 cents. Wheat got dragged higher by firming corn late in the day even though the market is conscious of rapidly rising export prospects coming out of the Black Sea. Russia may export anywhere from 15-20 MMT of wheat in 2011/12 according to an assortment of forecasts from various analysts (including the Russian Ministry), all of them much higher than the USDA's current 12 MMT assessment. If so, the most likely place that they will be stealing much of that business from is the US, with Europe's export prospects already trimmed by a third for 2011/12. The USDA's current projection that the US will export 31.5 MMT this season is therefore probably too high.