Chicago Soybeans Tumble On Argentine Rains

11/01/12 -- Soybeans: Jan 12 Soybeans closed at USD11.97 1/2, down 26 1/4 cents; Mar 12 Soybeans closed at USD12.03, down 29 cents; Jan 12 Soybean Meal closed at USD310.00, down USD9.00; Jan 12 Soybean Oil closed at 51.59, down 61 points. Beans fell heavily, as did rain in Argentina, giving up most of yesterday's gains. Funds sold 8,000 soybean contracts on the day as Argentina got a more widespread and heavier rainfall event than had been expected. We now need to see what happens there tomorrow with more rains in the forecast before they move north. Tomorrow's USDA report is the next highlight of the week. That isn't expected to do a lot for US soybean production or stocks. South America output is of course thought likely to be lowered with Argentina coming in around 25 MMT and Brazil around 72 MMT. Also tomorrow we have the USDA's weekly export sales which for beans are expected to be around 350-600 TMT.

Corn: Mar 12 Corn closed at USD6.51 1/2, down 1/2 cent; May 12 Corn closed at USD6.58 1/4, down 1 cent. Funds were said to have bought 5,000 corn contracts on the day as they "rebalance" their books in favour of the grain. That would have them building up a very significant long over the past couple of weeks. Argentine rains are thought to be less likely to benefit corn than soybeans at this stage. Tomorrow's USDA reports are expected to be bullish for corn with US 2011 production and 2011/12 ending stocks lowered. South American output is also expected to be cut with Argentine production coming in around 25 MMT (from 29 MMT last time) and the Brazilian crop to something like 59 MMT (from 61 MMT). Weekly export sales are thought likely to be in the region of 350-600 TMT.

Wheat: Mar 12 CBOT Wheat closed at USD6.41, up 1 1/4 cents; Mar 12 KCBT Wheat closed at USD7.01 3/4, up 3 3/4 cents; Mar 12 MGEX Wheat closed at USD8.16 1/2, up 4 1/4 cents. Tomorrow's USDA reports aren't thought likely to throw up too many surprises for wheat. The one area that is open for debate is US plantings for this year's harvest with trade estimates of around 39.6 to 42.8 million acres, compared to 40.65 million last time. Trade estimates for tomorrow's weekly export sales report range from 350 to 600 thousand MT. Weekly shipments will also be of interest as these frequently keep missing the target required to hit the USDA's estimate of 24.5 MMT for the full 2011/12 season, implying larger ending stocks than the trade currently expects.