Chicago Falls As Funds Exit Ahead Of USDA Report

07/03/12 -- Soybeans: Mar 12 Soybeans closed at USD13.21 1/2, down 8 1/4 cents; Nov 12 Soybeans closed at USD12.91 1/2, down 1 3/4 cents; Mar 12 Soybean Meal closed at USD360.90, down USD2.20; Mar 12 Soybean Oil closed at 52.61, down 31 points. Even soybeans can't go up every day it would seem, although you would hardly call this a capitulation ahead of Friday's USDA report. Funds were said to have sold around 6,000 soybean contracts by the end of the day on profit-taking. Given the weakness in corn and wheat in the past couple of sessions you could say that the soy complex has performed with remarkable resilience. The market is expecting a bullish report Friday, with the USDA thought likely to reduce world ending stocks for beans from 60.3 MMT to 57.8 MMT. US ending stocks are forecast to be reduced from 7.5 MMT last month to 7.0 MMT. Trade estimates for the weekly export sales out tomorrow range from 400 to 700 thousand MT.

Corn: Mar 12 Corn closed at USD6.43 3/4, down 14 1/4 cents; Dec 12 Corn closed at USD5.58, down 5 1/2 cents. This was corn's worst day since the January USDA report came out surprisingly bearish and corn closed limit down as the funds dumped 18,000 contracts. Today they were said to have ditched even more than that, with some estimates as high as 24,000 lots. Weekly export sales for tomorrow are forecast around 500 to 700 thousand MT. Friday's USDA report is expected to show Brazilian and Argentine corn production falling to 60.4 MMT and 21.3 MMT respectively (from 61.0 MMT and 22.0 MMT last month). US corn ending stocks are forecast down from 20.3 MMT to 20.0 MMT. World ending stocks are seen down 2 MMT from last month to 123.5 MMT.

Wheat: Mar 12 CBOT Wheat closed at USD6.33, down 21 cents; Mar 12 KCBT Wheat closed at USD6.77 3/4, down 9 3/4 cents; Mar 12 MGEX Wheat closed at USD8.04 1/2, down 5 1/2 cents. Wheat had another bad day at the office with funds selling an estimated 3,000 Chicago contracts on the day. The dollar was higher on yet more Greek jitters as tomorrow's deadline for bondholders to accept the offer on the table looms. Friday's USDA report is seen dropping world wheat ending stocks slightly from 213.1 MMT to 212.6 MMT, although some analysts are forecasting and increase to as high as 216 MMT. US ending stocks are seen falling slightly from 23.0 MMT to 22.8 MMT. Estimates for tomorrow's weekly export sales report are 300 to 500 thousand MT.