Chicago Wheat Crashes

Posted by Nogger - a legend in his own mind at 08:39 | Categorized as

12/10/11 -- Soybeans: Nov 11 Soybeans closed at USD12.39 1/2, up 4 cents; Jan 12 Soybeans closed at USD12.49 1/2, up 3 1/4 cents; Oct 11 Soybean Meal closed at USD320.10, up USD3.20; Oct 11 Soybean Oil closed at 51.60, down 35 points. Funds bought an estimated 5,000 bean contracts after the USDA report came in on the bullish side cutting projected US yields ending stocks. US production this year was reduced to 3.060 billion bushels, 21 million below what was expected. US ending stocks for 2011/12 were cut by 5 million from last month to 160 million when the market was expecting a rise to 183 million. World ending stocks were however raised slightly from last month to 63.0 MMT - in line with trade forecasts.

Corn: Dec 11 Corn closed at USD6.40 3/4, down 4 1/4 cents; Mar 12 Corn closed at USD6.52 3/4, down 4 3/4 cents. The USDA report was more of a mixed bag for corn, leaving US yields unchanged when an increase was expected and cutting production to 12.433 billion bushels versus the 12.471 billion expected. US 2011/12 ending stocks were however raised from 672 million to 866 million bushels, higher than the 806 million expected due to a 50 million decrease in exports. Ethanol usage remained unchanged at 5 billion bushels. World ending stocks for 2011/12 were increased from 117.4 MMT to 123.2 MMT (vs 119.97 MMT expected). China's corn crop was upped 4 MMT to 182 MMT. Funds sold an estimated 5,000 contracts on the day.

Wheat: Dec 11 CBOT Wheat closed at USD6.26 3/4, down 34 cents; Dec 11 KCBT Wheat closed at USD7.11, down 18 3/4 cents; Dec 11 MGEX Wheat closed at USD9.03 3/4, down 32 3/4 cents. Whilst the fireworks were expected to come from either corn or beans it was wheat that actually supplied them with a very bearish set of data. US 2011/12 ending stocks came in at 837 million bushels, up from 761 million last month and the 733 million expected. World production for 2011/12 was raised from 678.1 MMT to 681.2 MMT and the real shocker was global ending stocks increasing from 194.6 MMT to 202.4 MMT - a ten year high. Production increases came from Kazakhstan +3 MMT, with rises also from Australia, the EU-27 and Canada. Russia's export potential was raised 2 MMT as too was Australia's.