Chicago Close - Friday

16/12/11 -- Soybeans: Jan 12 Soybeans closed at USD11.30, up 18 1/4 cents; Mar 12 Soybeans closed at USD11.39 1/2, up 18 1/4 cents; Jan 12 Soybean Meal closed at USD290.30, up USD7.40; Jan 12 Soybean Oil closed at 49.55, dup 57 points. Jan 12 beans were 23 cents higher on the week. The market is still talking about weather concerns in South America. "Rio Grande do Sul, Brazil’s southernmost farm state and a key producer of corn and soybeans has been dry for over a month," say Martell Crop Projections. Further north things are less critical. In Mato Grosso "soybeans have been under heat and moisture stress for over a month, but growing conditions have stabilized recently with increasing showers. Recurring thunderstorms are developing in a trough of low pressure that extends from Mato Grosso in the Brazil interior to Minas Gerais on the Atlantic coast," they add. Informa Economics estimated the 2012 US soybean acreage at 74.608 million, down from the 76.1 million they forecast in November.

Corn: Mar 12 Corn closed at USD5.83, up 4 cents; May 12 Corn closed at USD5.91 3/4, up 4 cents. Mar 12 corn was 11 1/4 cents lower on the week. Informa Economics estimated the 2012 US acreage for corn at 94.389 million versus 94.0 million last month, around 2.5 million up on 2011 and a post-war record. Even so the South American weather story and spillover strength from beans was enough to see corn post modest gains by the close. Funds were said to have bought around 5,000 contracts on the day, although that would still place them selling something like 10,000 on the week. Ukraine remain aggressive sellers of their record 2011 crop and they could up their plantings around 12-15% in the spring due to lack of emergence issues amongst its winter wheat crop. A below-normal rainfall forecast for Southern Brazil in the week ahead could cause some yield losses for corn as pollination here typically peaks in December, say Martell Crop Projections.

Wheat: Mar 12 CBOT Wheat closed at USD5.83 3/4, up 4 1/2 cents; Mar 12 KCBT Wheat closed at USD6.39 1/2, up 2 cents; Mar 12 MGEX Wheat closed at USD8.11 1/4, down 4 1/2 cents. Chicago wheat was 12 1/4 cents lower on the week. The Buenos Aires Grain Exchange increased their forecast for wheat production in Argentina to 13.6 MMT from 13.0 MMT previously. That is still 0.9 MMT lower than the 14.5 MMT that USDA currently say however. In complete contrast the Ag Ministry there now say that this season's crop will only come in at 12.0 MMT, giving us a pretty wide spread considering that harvesting there is around halfway done. Informa Economics estimate US winter wheat plantings at 39.833 million, down 813,000 acres from last year. Funds still hold a sizable short in Chicago wheat, which may continue to limit downside potential, even though world stocks are seen at multi year highs, and close to the highest on record, at the end of 2011/12.