Chicago Closes Lower, Signs Of Corn Demand Destruction

26/07/12 -- Soycomplex: Aug 12 Soybeans closed at USD16.55 3/4, down 38 1/2 cents; Nov 12 Soybeans closed at USD15.67 1/2, down 48 cents; Aug 12 Soybean Meal closed at USD518.80, down USD11.00; Aug 12 Soybean Oil closed at 51.68, down 56 points. Overnight showers and some calls for a cooler and wetter outlook ahead encouraged more fund liquidation, selling an estimated 12,000 soybean contracts on the day. Combined weekly export sales beat expectations of 350-550 TMT at 710 TMT. The IGC cut their US soybean crop estimate by 8.3 MMT to 79 MMT, 4 MMT lower than the USDA's latest figure. However they did point out that: "World soybean production is expected to recover sharply in 2012/13, rising by some 9% year-on-year, although the forecast hinges on a strong rebound in output from South America where planting begins in the fourth quarter of 2012.

Corn: Sep 12 Corn closed at USD7.81 1/4, down 13 1/4 cents; Dec 12 Corn closed at USD7.76 1/4, down 11 3/4 cents. The USDA announced weekly export sales of -9,100 MT for old crop and –131,300 MT for new crop, the first time in more than 20 years that both old and new crop export sales have been negative. That obviously says something about demand at these price levels. Included in that was China selling back 240,000 MT of new crop purchases. The USDA attaché in Brazil says that corn exports there in both 2011/12 and 2012/13 will reach record highs. The IGC slashed their US corn production estimate this season by 50 MMT to 300 MMT versus the USDA's 329.5 MMT. World demand was however trimmed 32 MMT to 878 MMT versus the USDA's 900.5 MMT. The China Daily said that they imported 2.4 MMT of corn the first half of 2012, up 41% from last year, but not a stunning volume in the overall scheme of things. Fund selling was estimated at 10,000 contracts on the day.

Wheat: Sep 12 CBOT Wheat closed at USD8.84, down 19 1/4 cents; Sep 12 KCBT Wheat closed at USD8.90, down 14 cents; Sep 12 MGEX Wheat closed at USD9.67 3/4, down 21 1/4 cents. Wheat followed corn lower with funds selling an estimated 5,000 Chicago contracts on the day. Weekly export sales came in at 367,000 MT, a bit below trade expectations of 400-600 TMT. Indonesia rejected a cargo of Indian wheat on quality grounds, but then agreed to take it at an allowance. Jordan has reissued a tender for 100 TMT of optional origin wheat for Oct/Dec shipment having declined on the last two due to price. A spring wheat crop tour doing the round concluded with a 2012 yield estimate of 44.9 bpa compared with 41.5 bpa on last year's tour. Durum yields were pegged at 42.4 bpa against just 31.8 bpa a year ago. Russia’s Prime Minister will apparently hold a meeting on August 8th to discuss the grain market - almost two years to the day after the infamous 2010 export ban was introduced.