Chicago Reverses Wednesday's Losses

19/01/12 -- Soybeans: Mar 12 Soybeans closed at USD11.97, up 13 1/2 cents; May 12 Soybeans closed at USD12.04 1/4, up 12 cents; Mar 12 Soybean Meal closed at USD315.70, up USD3.70; Mar 12 Soybean Oil closed at 51.06, up 66 points. With China closed next week for the Lunar New Year celebrations there have been strong rumours all week of them actively buying soybeans. Before the open the USDA confirmed the sale of 110,000 MT of soybeans to China. The trade will now be interested to see what, if anything, shows up in tomorrow's weekly export sales report. Trade estimates for that are 500 to 900 thousand MT. Even so, weekly shipments are well behind year ago levels, suggesting that many of the outstanding sales were "optional origin" not specifically US beans. Argentina gets a very decent shot at significant rains this weekend and into next week.

Corn: Mar 12 Corn closed at USD6.06, up 12 1/2 cents; May 12 Corn closed at USD6.12, up 11 3/4 cents. Corn reversed Wednesday's losses with funds said to have bought 12,000 contracts on the day. The USDA announced the sale of 154,700 MT of US corn sold to Mexico. South Korea also bought 230,000 MT of corn overnight, with 110,000 MT of that confirmed today as US origin. The market is comfortable that corn below USD6/bu will flush out the buyers. Trade estimates for tomorrow's weekly export sales range from 500 to 850 thousand MT. Last week's corn sales were only 321,500 MT for 2011/12 and negative 23,000 MT for 2012/13. The International Grains Council raised world corn production by 8 MMT for 2011 to 861 MMT with carryover coming in at 125 MMT, 2 MMT higher than previously. Decent rains are on the cards for Brazil and Argentina this weekend and early next week.

Wheat: Mar 12 CBOT Wheat closed at USD6.05 3/4, up 13 1/2 cents; Mar 12 KCBT Wheat closed at USD6.58, up 5 cents; Mar 12 MGEX Wheat closed at USD7.99, down 1 3/4 cents. Wheat simply followed corn and beans higher. The International Grains Council upped their 2011/12 world wheat production estimate by 7 MMT to 690 MMT today, with ending stocks upped 4 MMT to 204 MMT. Elsewhere Strategie Grains forecast an EU-27 2012 soft wheat crop of 133.3 MMT, a 3% increase on last year. They also peg 2012/13 EU wheat ending stocks 20% up on this season and world wheat ending stocks for next season at a record 211 MMT. Trade estimates for tomorrow's weekly export sales report range from 350 to 600 thousand MT. As ever it will be the weekly shipment total that I will be more interested in. Shipments of just 196,200 MT last week were the lowest since the first week of the marketing year - well below the 465,000 MT level now needed to reach the USDA's export target of 25 MMT.