Chicago Close - Thursday

11/08/11 -- Soybeans: Aug 11 Soybeans closed at USD13.33 3/4, up 33 cents; Nov 11 Soybeans closed at USD13.31 3/4, up 30 1/4 cents; Aug 11 Soybean Meal closed at USD347.20, up USD8.10; Aug 11 Soybean Oil closed at 54.03, up 100 points. Funds bought an estimated 7,000 soybean contracts as the USDA lowered the 2011 US soybean yield by 2 bushels/acre, more than the 1.4bpa that the trade expected. That cuts production to 3.056 billion bushels, compared to the 3.174 billion that was anticipated. World stocks for 2011/12 were cut to 60.95 MMT on lower US production and increased world usage.

Corn: Sep 11 Corn closed at USD7.02 1/2, up 24 1/2 cents; Dec 11 Corn closed at USD7.14, up 25 1/2 cents. Funds bought an estimated 15,000 contracts on the day as the USDA cut it's 2011 yield forecast by an aggressive 5.7 bushels/acre to 153bpa. It was the fact that they were prepared to confirm this sharply reduced yield potential rather than their normal style of chipping away slowly that surprised the market. Ending stocks for 2011/12 were cut from 870 million bushels last month to 714 million, compared to the 751 million the trade was anticipating.

Wheat: Sep 11 CBOT Wheat closed at USD7.01 1/4, up 16 1/4 cents; Sep 11 KCBT Wheat closed at USD8.08, up 23 cents; Sep 11 MGEX Wheat closed at USD8.62 1/2, up 25 1/4 cents. US all wheat production was pegged marginally lower than the trade anticipated at 2.077 billion bushels (2.085 billion expected). Increases in production principally from Europe, Ukraine and Russia however saw projected 2011/12 world ending stocks rise by much more than anticipsted to 188.87 MMT. US exports were cut 1.5 MMT as Russia and Ukraine's were increased. Almost unnoticed were weekly export sales below forecast at 376,100 MT.