Chicago Mixed As "Europhoria" Dies Down

28/10/11 -- Soybeans: Nov soybeans ended down 18c to USD12.17 a bushel; Dec soymeal fell USD6.00 to USD317.50; Dec soyoil ends down 34 points to 51.77. At the end of a topsy turvy week as a whole beans gained just 4 3/4 cents, with meal up a dollar and oil rising 52 points. South America is already starting to take centre stage and early crop conditions there are promising. In Brazil's top soybean producing state of Mato Grosso has received generous October rainfall and soybean planting there was reportedly 45% complete earlier in the week compared to only 19% this time last year. In Argentina, waves of showers this month have restored field moisture in La Pampa, Cordoba, Santa Fe and Entre Rios making field conditions favourable for spring planting, say Martell Crop Projections. The USDA currently predict a record area going into soybean production in both Brazil and Argentina this season.

Corn: December corn closed up 3 1/2c at USD6.55/bushel; March corn ends up 3 1/2c at USD6.67/bushel. On the week as a whole Dec was up 5 3/4 cents and Mar up 7 cents. Following the initial impetus that the European debt deal provided next week's price action will be interest as some of the lustre already seems to be wearing off. This week's export sales were poor and there are reports of Taiwan buying Ukraine corn at prices way under US levels. Japan also bought Ukraine corn earlier in the week, with the FSU country expected to ship a record 12 MMT this season, according to the USDA. The Buenos Aires Cereals Exchange says that recent rains there could boost the corn planted area to a record 3.7 million hectares. The USDA forecast a record 27.5 MMT crop there, up 5 MMT on last year and see exports also at a record 19.5 MMT, up 4.5 MMT on last year.

Wheat: CBOT Dec wheat ends up 1/2c to USD6.44 1/2 per bushel; Dec MGEX wheat closes up 2 1/2c at USD9.20 1/2; Dec KCBT wheat ends flat at USD7.38. On the week overall Chicago wheat is up 12 1/2 cents, with Minneapolis gaining 1 1/4 cents and Kansas up 15 cents. Funds bought an estimated 3,000 CBOT contracts on the day but still hold a significant short position, which is underpinning the market despite US wheat looking increasingly expensive on the export stage. The USDA downgraded it's forecast for US wheat exports by 2 MMT this month to 26 MMT, down 10 MMT on last season, but even that is looking increasingly optimistic in the light of bumper production in most of the other major exporting nations. Russia's exports may tail off around Feb/Mar as they approach Putin's suggested comfort zone of 24-25 MMT of foreign grain sales, but Ukraine, Kazakhstan and Australia too will be only to eager to fill the void.