Chicago Closing Comments

11/06/12 -- Soybeans: Jul 12 Soybeans closed at USD14.24 3/4, down 1 1/2 cents; Nov 12 Soybeans closed at USD13.31 1/4, down 1 1/4 cents; Jul 12 Soybean Meal closed at USD428.0, down USD1.80; Jul 12 Soybean Oil closed at 49.70, up 24 points. Funds sold an estimated 3,000 soybean contracts on the day, reducing their length a little heading into tomorrow's USDA report. Not that it is expected to be bearish for soybeans, US 2011/12 soybean ending stocks are expected to be cut from 210 million bushels to around 190 million and 2012/13 carryout trimmed even tighter to 143 million. For Argentine bean production the average trade estimate is 40.7 MMT vs. 42.5 MMT last month. For Brazil it's 65.6 MMT against last month's estimate of 65.0 MMT. Early optimism over the weekend deal for Greek banks quickly waned on ideas that Cyprus will swiftly follow looking for a bailout. Crude oil prices fell to their lowest in eight months settling down 1.7%, or USD1.40, at USD82.70 a barrel, completely erasing early gains and then some. After the close the USDA cut good/excellent soybean crop ratings by five percentage points to 60%. Emergence is 90% compared to 67% normally. Plantings are almost done at 97%.

Corn: Jul 12 Corn closed at USD5.92, down 6 cents; Dec 12 Corn closed at USD5.34, down 10 cents. Funds were said to have sold around 10,000 corn contracts on the day. US weather forecasts were a bit more favourable, citing cooler temperatures and more rain chances. Weekly export inspections were poor at 17.0 million bushels compared to 27.4 million last week and 35.4 million for the same week last year. Tomorrow's 2011/12 US corn carryout is estimated at 828 million bushels versus the May USDA report figure of 851 million. For 2012/13 the trade is forecasting ending stocks of 1.740 billion bushels versus the May USDA estimate of 1.881 billion. For Argentine corn production the average estimate is 20.4 MMT compared to the May USDA report estimate of 21.5 MMT. Brazil's corn crop is seen at 67.6 MMT versus the May USDA report estimate of 67.0 MMT. Old crop 2011/12 world ending stocks are seen little changed at 127.6 MMT, with those of 2012/13 coming in at 149.7 MMT. After the close the USDA cut US corn ratings from 72% good/excellent to 66%, with poor/very poor rising from 5% to 8%.

Wheat: Jul 12 CBOT Wheat closed at USD6.30 1/2, up 1/4 cent; Jul 12 KCBT Wheat closed at USD6.53, down 3 cents; Jul 12 MGEX Wheat closed at USD7.79 3/4, up 10 1/2 cents. Tomorrow's USDA report is expected to show 2012/13 US all wheat production at 2.222 billion bushels, from within a range of estimates of 2.112 – 2.310 billion and versus the May USDA report estimate of 2.245 billion and 2011/12 production of 1.999 billion. Old crop 2011/12 carryout is seen at 757 million bushels versus the May USDA report estimate of 768 million. New crop 2012/13 ending stocks are also seen being trimmed slightly at 728 million versus the May USDA report estimate of 735 million. World wheat ending stocks for 2011/12 are seen broadly unchanged at 197 MMT and 2012/13 carryout pegged at 184.8 MMT versus 188.1 MMT last time. The bottom line being that US and world wheat stocks are still at very comfortable levels. After the close the USDA said that the US winter wheat harvest was now 35% done compared to just 9% normally. Spring wheat crop conditions fell slightly in the good/excellent category but to a still very respectable 75%.