Chicago Soybeans Rise For Seventh Session In A Row

28/02/12 -- Soybeans: Mar 12 Soybeans closed at USD13.05 1/4, up 11 1/2 cents; Nov 12 Soybeans closed at USD12.88 1/2, up 7 1/4 cents; Mar 12 Soybean Meal closed at USD346.50, up USD5.60; Mar 12 Soybean Oil closed at 54.42, down 4 points. Funds bought an estimated 8,000 soybean contracts on the day, pushing beans higher for the seventh session in a row and to a close above USD13/bu for the first time for a front month since September. Oil World see global soybean production down 19 MMT this year, primarily due to losses in Brazil, Argentina and Paraguay. Celeres say that the Brazilian soybean harvest is 29% complete as of Friday, up ten points from this time last season. Private estimates are for a crop there of 68-70 MMT compared to the USDA's 72 MMT.

Corn: Mar 12 Corn closed at USD6.53 1/2, up 9 cents; Dec 12 Corn closed at USD5.63 1/2, up 6 1/2 cents. Funds were said to have bought a weighty 18,000 contracts on the day, a volume that sellers found difficult to accommodate especially on old crop. The new crop picture looks quite a bit different though with potentially record US production and falling demand from the ethanol sector. Pacific Ethanol are forecasting a 5% drop in corn for ethanol usage in 2012, although they say that their own grind will fall by more. The differential between old crop and now crop therefore continues to widen. As we approach the last trading day of the month the Mar/Dec spread is 90 cents, on the last day of January it was less than 70 cents and on the last day of 2011 it stood at 60 cents.

Wheat: Mar 12 CBOT Wheat closed at USD6.62 1/4, up 16 1/2 cents; Mar 12 KCBT Wheat closed at USD6.99 1/2, up 14 1/2 cents; Mar 12 MGEX Wheat closed at USD8.02 1/4, up 11 1/2 cents. Funds were said to have bought 4,000 Chicago wheat contracts on the day, making them net buyers all round. The spread between Chicago and Minneapolis continues to narrow, albeit from an extraordinary wide level on perceived improved prospects for spring wheat production both in the US and Canada. Despite today's fund buying they still remain heavily short CBOT wheat, and that is their Achillies heel. Russia announced that they expect to ship 27-28 MMT of grains this season, so it will be interesting to see if their rate of exports picks up again once more clement weather conditions arrive.