Chicago Closing Comments - Wednesday

25/01/12 -- Soybeans: Mar 12 Soybeans closed at USD12.13 1/2, down 6 1/2 cents; May 12 Soybeans closed at USD12.22 3/4, down 6 cents; Mar 12 Soybean Meal closed at USD321.10, down USD2.40; Mar 12 Soybean Oil closed at 51.39, up 4 points. Decent overnight rain in Argentina had funds selling an estimated 4,000 soybean contracts on the day. Opinion is still divided on how much bean damage has already taken place. Local analyst Cropcast came out with one of the most pessimistic crop estimates yet, putting the soybean crop there at 45 MMT - 5.5 MMT lower than the USDA.

Corn: Mar 12 Corn closed at USD6.34 1/2, up 4 1/4 cents; May 12 Corn closed at USD6.40 1/4, up 5 cents. Corn rose on ideas that whilst Argentine rains may help beans they have arrived too late for corn. Funds bought an estimated 8,000 contracts on the day, adding to their recent purchases and increased long position. The weak dollar was also supportive following an announcement by the Fed that very low interest rates will continue to be the norm for at least the next couple of years. The gap between old crop and new crop continues to widen. Rising prices now will only encourage more corn acres in the spring. Estimates for tomorrow’s weekly export sales report range from 650 to 850 thousand MT.

Wheat: Mar 12 CBOT Wheat closed at USD6.41 1/4, up 7 3/4 cents; Mar 12 KCBT Wheat closed at USD6.97, up 11 cents; Mar 12 MGEX Wheat closed at USD8.12 3/4, up 9 cents. Funds were said to have been buyers of around 2,000 Chicago wheat contracts on the day, although that would still leave them holding a hefty short position. It is that short that is supporting the market. Estimates for tomorrow’s weekly export sales range from 500 to 700 thousand MT. Sales are on target, it's shipments that aren't and I'd expect them to fall short of the 474 TMT required to hit the USDA's 2011/12 target of 25 MMT once again tomorrow. They've done that in 13 of the last 15 weeks.