Chicago Closing Comments

12/06/12 -- Soybeans: Jul 12 Soybeans closed at USD14.35, up 10 1/4 cents; Nov 12 Soybeans closed at USD13.37, up 5 3/4 cents; Jul 12 Soybean Meal closed at USD433.00, up USD5.00; Jul 12 Soybean Oil closed at 49.72, down 2 points. The USDA gave us a bullish S&D report as far as soybeans were concerned, who's gains may well have been more if it wasn't for weakness in corn. US old crop carryout was cut from 210 million bushels to 175 million, versus the 197 million expected. New crop ending stocks are pegged even tighter at 140 million bushels, which represents a stocks to usage ratio of just 4.3%. Considering that this particular scenario uses a 2012 yield estimate of 43.9 bu/acre and that current good/excellent crop conditions are 60% versus 67% a year ago when yields ultimately came in at only 41.5 bu/acre, then it would seem that this particular number could get a whole lot tighter yet.

Corn: Jul 12 Corn closed at USD5.84, down 8 cents; Dec 12 Corn closed at USD5.22 1/2, down 11 1/2 cents. For corn the USDA report was entirely different, at least on paper. Neither old nor new crop US ending stocks were reduced as the trade expected, both being left unchanged instead at 0.851 and 1.881 billion bushels respectively. In addition 2011/12 world ending stocks were raised more than anticipated to 129.2 MMT and 2012/13 global carryout was increased to 155.7 MMT when a reduction to 149.75 MMT was expected. Projected 2012 US yields were left at an ambitious looking 166 bu/acre, a figure generally expected to prove too high - it is noted that the USDA have a track record of not lowering yield estimates in the June S&D report, usually waiting until July to do this. Weather forecasts seem to be adopting a cooler and wetter look for the Midwest a week from now. Funds were said to have been net sellers of around 12,000 corn contracts on the day.

Wheat: Jul 12 CBOT Wheat closed at USD6.16, down 14 1/2 cents; Jul 12 KCBT Wheat closed at USD6.40 3/4, down 12 1/4 cents; Jul 12 MGEX Wheat closed at USD7.64 1/4, down 15 1/2 cents. For wheat the USDA report was actually a bit friendly, but weakness in corn spilled over into wheat dragging it lower too. World production in 2012/13 was lowered 5.5 MMT to 672 MMT. That included Europe's wheat crop being cut by 1 MMT to 131 MMT and Russia's reduced 3 MMT to 53 MMT. US wheat carryout for both old and new crop was cut by a bit more than anticipated and world wheat ending stocks were trimmed 2.4 MMT to 185.8 MMT. US all wheat production in 2012 was estimated at 2.234 billion bushels, down slightly from 2.245 billion last month but marginally above the average trade guess of 2.222 billion. US 2012/13 wheat ending stocks were pegged at 694 million bushels, 34 million lower than in 2011/12, but that still equates to an ample stocks to usage ratio of 29.1%.