Chicago Grains Extend Slump

25/11/11 -- Soybeans: Jan 12 Soybeans closed at USD11.06 1/2, down 16 cents; Mar 12 Soybeans closed at USD11.15 3/4, down 15 3/4 cents; Dec 11 Soybean Meal closed at USD282.70, up USD0.20; Dec 11 Soybean Oil closed at 48.23, down 109 points. Beans closed at or close to session lows which saw front month Jan 12 get within 5 cents of dipping below USD11.00/bushel. On the week as a whole beans declined 61 3/4 cents, meal USD15.70 and oil 265 points. Weekly export sales were better than expected 921,600 MT, but even that couldn't stem the bearish tide of money flowing out of ag commodities this week. The unfolding European debt crisis has seen the US dollar rise the best part of 5% against the euro in the past month, weighing on US commodities.

Corn: Dec 11 Corn closed at USD5.82 1/2, down 6 1/4 cents; Mar 12 Corn closed at USD5.90, down 5 1/2 cents. On the week as a whole Dec corn was down 27 3/4 cents closing at the lowest levels for a front month since before last Christmas. Corn export sales fell below expectations for the third week in a row at 312,000 MT for 2011/2012 and 38,000 MT for delivery in 2012/2013. Funds sold an estimated 5,000 contracts on the day, meaning that they've been net sellers for each of the last seven trading sessions dumping 69,000 lots during that time. Whilst EU wheat sales are lagging last season's pace, corn sales here are sharply higher with Brussels granting three times as many export licences as a year ago. Ukraine is also rampaging around the world with it's bumper corn crop for sale, and then they've got feed wheat to shift too, along with Australia.

Wheat: Dec 11 CBOT Wheat closed at USD5.74 1/2, down 4 3/4 cents; Dec 11 KCBT Wheat closed at USD6.43 1/2, down 5 1/2 cents; Dec 11 MGEX Wheat closed at USD8.27 1/4, down 8 1/2 cents. On the week overall Chicago wheat shed 23 3/4 cents, Kansas wheat 25 cents and Minneapolis wheat 90 cents. The huge spread between Minneapolis and Chicago wheat has given up 66 1/4 cents on the week. US weekly export sales for wheat were better than the expected 300 to 450 TMT at 614,500 MT. The devil is in the detail though, weekly shipments have now fallen below the level needed to meet what the USDA says America will export in 2011/12 six times in the past seven weeks. Dollar strength is a big problem, and despite Chicago wheat now residing at the lowest levels since July 2010 they haven't even come close to getting a foot in the door with the likes of Egypt during the entire current marketing year.