Chicago Soybeans Hit Highest Since 2008

24/04/12 -- Soybeans: May 12 Soybeans closed at USD14.61 1/4, up 24 cents; Nov 12 Soybeans closed at USD13.52, up 10 1/2 cents; May 12 Soybean Meal closed at USD412.10, up USD12.30; May 12 Soybean Oil closed at 55.29, up 20 points. For soybeans this was the highest close for a front month since the big pre-sub prime price spike of 2008 when crude oil went to USD147/barrel. Funds were said to have added around 8,000 contracts to their already substantial length, but with strong justification from the fundamentals. As the Argentine harvest progresses, yields continue to disappoint and production forecasts are getting cut on a weekly basis. Oil World lopped 1.5 MMT off their estimate today to 42.5 MMT, whilst local analyst Michael Cordonnier cut his by 2 MMT to 41.5 MMT and warned that further cuts are possible. A surprise, and early, hard freeze in Argentina may also have caused some damage. Meanwhile we continue to see solid demand from China, who would normally have switched it's attention to South America by now, but they keep coming back to buy US beans on an almost daily basis.

Corn: May 12 Corn closed at USD6.18 1/4, down 4 1/4 cents; Dec 12 Corn closed at USD5.41 1/2, down 4 cents. With the USDA confirming the sale of 480,000 MT of US corn to "unknown" today, you would have expected a firmer close, but what we got was a "buy the rumour, sell the fact" reaction. There would seem to be a distinct possibility that further sales to "unknown" are likely in the next few days. Stats Canada pegged the all wheat acreage there 3 million up on last year and almost a million higher than the average trade guess for a 13.3% increase on 2011. Corn for grain acreage is seen rising 18.4% compared with last year's wash-out. The market may have been a little spooked by the USDA announcing a confirmed case of BSE in a dairy cow in California sending cattle prices limit down at the close.

Wheat: May 12 CBOT Wheat closed at USD6.24 1/2, down 1/2 cent; May 12 KCBT Wheat closed at USD6.33, down 2 1/4 cents; May 12 MGEX Wheat closed at USD7.84 1/2, down 7 1/4 cents. Wheat showed double digit gains early on but got dragged lower by corn as the session wore on. The Stats Canada numbers were bearish for wheat, showing spring wheat plantings up 9% to 17.178 million acres and durum wheat up 27% to 5.1 million acres. Chicago wheat fared better than its Kansas and Minneapolis counterparts on short-covering. Freeze prospects for the weekend kept a floor on declines given the rapid progress that has been made with spring wheat plantings in northern states. In contrast, the forward condition of winter wheat means  that harvesting of that is right around the corner.