Chicago Up Again, With Old Crop Gaining The Most

27/04/12 -- Soybeans: May 12 Soybeans closed at USD14.96 3/4, up 15 1/2 cents; Nov 12 Soybeans closed at USD13.62, up 3 1/4 cents; May 12 Soybean Meal closed at USD427.40, up USD7.80; May 12 Soybean Oil closed at 55.18, down 19 points. For the week as a whole May 12 beans gained 60 cents, with new crop Nov 12 up only 6 cents this has clearly been all about old crop. May 12 meal was USD21.40 higher on the week, with May 12 oil losing 65 points. Strong rumours of Chinese buying US beans appeared to have at least been partially confirmed with the USDA today reporting the sale of 110,000 MT of new crop soybeans to China plus 116,000 MT to "unknown". Informa Economics slashed their 2012 Argentine soybean production estimate from 45 MMT to 40 MMT. May 12 beans hit a fresh contract high of USD15.09 but failed to hold above the USD15/bu level in what was possibly a bit of pre-weekend profit-taking. Funds were said to have been net buyers of 6,000 soybean contracts on the day.

Corn: May 12 Corn closed at USD6.53, up 29 cents; Dec 12 Corn closed at USD5.38 3/4, up 3 3/4 cents. On the week overall May 12 corn was up 40 1/2 cents and Dec 12 up 2 cents. As with soybeans it was old crop that did almost all the gaining this week. The USDA today reported a whopping 1.44 MMT of new crop to "unknown" along with 120,000 MT of old crop to China in what was said to be the largest one day corn sale since 1991. Following reports of smaller sales earlier in the week, his brings the total sales to China/unknown to over 2.8 MMT this week, with almost 700 TMT of it coming off an already very tight old crop position. We now have front month May 12 at a USD1.14 1/4 cent premium to Dec 12 compared with 75 3/4 cents just a week ago. The trade already seems to be banking on an early harvest to alleviate some of this old crop tightness.

Wheat: May 12 CBOT Wheat closed at USD6.42 1/4, up 16 1/4 cents; May 12 KCBT Wheat closed at USD6.46 1/2, up 7 1/4 cents; May 12 MGEX Wheat closed at USD7.74, up 6 1/4 cents. For the week Chicago wheat added 26 1/2 cents, Kansas was up 20 1/2 cents and Minneapolis fell 17 cents. Spillover support from corn helped wheat today, along with widespread talk that the acute tightness in old crop corn is and will continue to boost demand for wheat from the feed sector. There's some continued talk of too dry in the south and freeze potential in the north. The Commitment of Traders report shows funds reducing their net short position in Chicago wheat by 11,500 contracts for the week through to Tuesday. Trade estimates have them further cutting that short by a similar amount since.