Chicago Closing Comments

10/05/12 -- Soybeans: May 12 Soybeans closed at USD14.52 1/4, up 24 1/2 cents; Nov 12 Soybeans closed at USD13.59, up 25 1/2 cents; May 12 Soybean Meal closed at USD423.90, up USD9.00; May 12 Soybean Oil closed at 53.15, up 69 points. Beans led the way sharply higher on the back of a bullish USDA report that reduced old crop ending stocks by more than anticipated and pegged new crop inventories well below market expectations. The 2011/12 soybean carryout was cut from 250 to 210 million bushels and 2012/13 ending stocks were estimated at a very tight 145 million bushels. Insatiable China's 2011/12 soybean imports are seen rising 3.7 MMT to 56 MMT, and by a further 4 MMT to 61 MMT in 2012/13. Weekly export sales were also bullish at 466,500 MT for old crop and a hefty 1,360,500 MT for new crop giving a combined total of 1,827,000 MT versus expectations of 1.2-1.4 MMT. It should be noted that China accounted for more than 1 MMT of the combined total. Funds were said to have bought around 7,000 soybean contracts on the day.

Corn: May 12 Corn closed at USD6.25 1/2, down 15 3/4 cents, Dec 12 Corn closed at USD5.07 1/4, down 9 1/2 cents. Funds were said to have sold 23,000 corn contracts on the day after the USDA surprised the market by raising old crop ending stocks rather than reducing them by 50 million bushels to 851 million bushels, around 90 million more than the trade was expecting. They also gave us the largest US corn crop in history this year - over 375 MMT. They said that 2012/13 ending stocks will more than double to 1.881 billion bushels and pegged the world corn crop at almost 946 MMT, far higher than the IGC's recent 900 MMT. Brazil's crop was seen increasing 5 MMT from last month to 67 MMT. Weekly corn export sales were 224,200 MT old crop and 249,200 MT new crop, well under the combined 1.1-1.3 MMT that the trade was expecting.

Wheat: May 12 CBOT Wheat closed at USD5.94 3/4, up 3 1/2 cents; May 12 KCBT Wheat closed at USD6.09 1/2, up 1 1/2 cents; May 12 MGEX Wheat closed at USD7.30, down 1 1/4 cents. There were both bullish and bearish numbers for wheat in today's USDA report. Kansas was forecast to produce a 387 million bushel winter wheat crop this year, 40% up on last year. The US all wheat crop was estimated at 2.245 billion bushels, more than expected and 12.3% up on last year. They also pegged global wheat production at 677.6 MMT in the year ahead, some 17 MMT down on last year, a fall of 2.5 percent. Global wheat consumption is seen falling around 8 MMT next season, due to the outlook for a bumper world corn crop which absorbs some of this lower production. Even so, at 686.5 MMT the world will consume 11 MMT more wheat than it produces in 2012/13, meaning that world ending stocks for wheat are seen declining by 9 MMT to 188 MMT.