Chicago Closing Comments

30/09/11 -- Soybeans: Nov 11 Soybeans closed at USD11.79, down 51 cents; Jan 12 Soybeans closed at USD11.89 1/2, down 51 3/4 cents; Oct 11 Soybean Meal closed at USD304.70, down USD12.20; Oct 11 Soybean Oil closed at 49.95, down 168 points. On the week Nov beans were down 79 cents, with Oct meal falling USD21.30 and Oct oil losing 245 points. These are the the lowest front month levels on beans and meal since last October, and the first time oil has been under USD50 since last November. Front month December crude slumped below USD79/barrel for the lowest close on the weekly chart since July 2010. Funds sold an estimated 15,000 soybean contracts as the smart money continues to exit commodities, spurred on by spillover weakness from corn. The USDA report was actually modestly supportive for beans, with Sept 1st stocks coming in 10 million below trade estimates at 215 million bushels. Lord knows what would have happened to beans if it had been bearish!

Corn: Dec 11 Corn closed at USD5.92 1/2, down the new 40 cents limit, Mar 12 Corn closed at USD6.05 3/4, also down 40 cents. Dec corn was 46 cents lower on the week and USD1.65 easier on the month. The last time we saw a front month begin with a five was before last Christmas. Funds expunged themselves of an estimated 30,000 contracts on the day as the USDA pegged September 1st stocks at 1.128 billion bushels, 164 million higher than what was expected and 208 million up on their August 2010/11 carryout estimate. The USDA numbers appear to confirm that prices in the USD7-8.00/bu region did induce some demand rationing across the summer. Weakness in crude added to the bearish tone for corn in particular.

Wheat: Dec 11 CBOT Wheat closed at USD6.09 1/4, down 45 cents; Dec 11 KCBT Wheat closed at USD7.04, down 36 cents; Dec 11 MGEX Wheat closed at USD8.92 1/4, down 3 1/4 cents. Minneapolis wheat held up well as the USDA pegged the HRS crop at 405 million bushels. CBOT Dec wheat fell 31 1/2 cents on the week, with Dec Kansas wheat down 27 1/2 cents and Dec Minneapolis up 41 1/4 cents. Funds were said to have sold 8,000 Chicago contracts on the day on spillover weakness from corn. The USDA pegged Sept 1st all wheat stocks a bit higher than trade estimates at 2.15 billion bushels. June-August disappearance was down 2% from last year at 720 million bushels. That's a surprise, as you would think that reduced corn usage across the summer would mean increased demand for wheat from the feed sector.