Chicago Closing Comments - Friday

27/07/12 -- Soycomplex: Aug 12 Soybeans closed at USD16.84 1/4, up 28 1/2 cents; Nov 12 Soybeans closed at USD16.01 3/4, up 34 1/4 cents; Aug 12 Soybean Meal closed at USD527.70, up USD8.90; Aug 12 Soybean Oil closed at 52.04, up 36 points. On the week that places Aug 12 beans 73 1/4 cents lower, with Nov 12 beans down 84 1/2 cents. Aug 12 meal fell USD15.30 and Aug 12 oil lost 232 points and remains the weakest link of the complex. Private firm Informa Economics came out with a revised 2012 US soybean yield estimate of 38.5 bushels/acre, some 2.0bpa lower than the USDA said earlier this month. Another firm, Lanworth Inc, pioneers of the use of satellite technology to assist yield predictions came out with a figure of 35.7bpa, 14% down on last year, which implies a crop of just 2.69 billion bushels using the USDA's 2012 harvested area estimate. Weather remains the key as to whether yields have a chance of recovering from here. "July monthly temperatures are on track to set a new record, as month- to- date temperatures have averaged 80.1 F. Soybeans have a chance to out-perform corn with better yields, but heavy rainfall is needed to reverse a declining crop," say Martell Crop Projections.

Corn: Sep 12 Corn closed at USD7.98 1/2, up 17 1/4 cents; Dec 12 Corn closed at USD7.93 1/4, up 17 cents. For the week overall Sep 12 was 26 cents lower and Dec 12 fell 2 1/2 cents. It's been a volatile week, with strong signs of rationing at these levels courtesy of yesterday's negative weekly export sales for both old and new crop years for the first time in more than 20 years. Production however could still come in considerably worse than the USDA's existing 146 bushels/acre suggests. Informa Economics, a group normally associated with conservative estimates, today forecast 2012 US corn yields at 134bpa, and the often more aggressive Lanworth Inc came in with one of the lowest yet at just 122bpa. The former suggests a crop of 11.9 billion bushels and the latter just 10.839 billion, using the USDA's 2012 harvested area forecast. If things are as bad as that of course then the USDA's harvested area estimate is also almost certainly too high as abandonment/silaging levels will be higher than the USDA currently predict.

Wheat: Sep 12 CBOT Wheat closed at USD8.98, up 14 cents; Sep 12 KCBT Wheat closed at USD9.06, up 16 cents; Sep 12 MGEX Wheat closed at USD9.72, up 4 1/4 cents. For the week Chicago wheat was 45 1/4 cents lower, with Kansas wheat down 35 cents easier and Minneapolis down 59 1/2 cents. The Russian Weather Centre cut their forecast for the 2012 grain harvest there from 83-86 MMT to 77-80 MMT. The IGC cut their Russian wheat export forecast by 3 MMT to 9 MMT and also reduced Kazakhstan's export potential by 2.5 MMT to 7 MMT. The USDA currently see Russia exporting 12 MMT of wheat in 2012/13, although they agree with the IGC's estimate for Kazakhstan. In addition the USDA have Ukraine's wheat exports 0.5 MMT higher than the IGC at 4.0 MMT. The Ukraine Agribusiness Club now place wheat exports there at only 2.5 MMT. The IGC also estimated the 2012 US all wheat crop at 60.5 MMT, up 11% on last year, with the Canadian crop coming in at 26.5 MMT, which is 5% more than a year ago.