Chicago Market Consolidates Heading Into The Weekend

06/07/12 -- Soycomplex: Jul 12 Soybeans closed at USD16.19 3/4, down 6 3/4 cents; Nov 12 Soybeans closed at USD15.05 3/4, down 20 3/4 cents; Jul 12 Soybean Meal closed at USD471.60, down USD2.70; Jul 12 Soybean Oil closed at 53.27, down 88 points. For the week as a whole Jul 12 beans were 107 cents higher, with Nov 12 rising 78 cents. Jul 12 meal was up USD35.60 and Jul 12 oil gained 106 points. The USDA reported strong weekly export sales of a combined 1.76 MMT. Of that total almost 300 TMT was old crop with the remaining 1.46 MMT new crop, with China/unknown the usual featured buyer. In addition, the USDA also today reported the sale of 120,000 MT of old crop soybeans to China under the daily reporting system. "Strong cooling is predicted in the Midwest beginning Sunday, and persisting for several days, with temperatures falling 15 – 20 F to near normal levels for the Midwest - into the lower 80s F for highs and 60-65 F for lows. Amazingly, not much rainfall is expected in the Midwest however, with cool and dry Canadian air taking over. Perhaps one-quarter inch of rain would occur. Very heavy rainfall up to 3 inches is predicted in the Mid South where the cool front stalls out," say Martell Crop Projections.

Corn: Jul 12 Corn closed at USD7.43 1/4, down 24 3/4 cents; Dec 12 Corn closed at USD6.93, down 15 1/2 cents. Profit-taking and consolidation ahead of the weekend was only to be expected. Even so Jul 12 corn added more than 70 cents for the week, with Dec 12 gaining 58 1/4 cents. There is some evidence of prices choking off demand however. Weekly export sales of just 19,300 MT of old crop corn were a marketing-year low. With only 134,200 MT of new crop being sold this week, we have a combined total of 153,500 MT - below even the fairly modest trade expectations of 200-500 TMT. The trade is focused on next Wednesday's USDA WASDE report, and how much US corn yields will be cut. The average trade estimate is now lining up around 147 bu/acre, although the range of estimates is pretty wide with some below 140 and others above 150 bu/acre. The USDA do have a tendency to err on the side of caution, although this isn't always the case. It will also be interesting to see what they say with regards to demand. We know that some ethanol plants are taking downtime due to high corn prices, and scarce availability, plus falling crude oil levels. WTI crude closed more than USD3.00/barrel lower tonight after weak US jobs data and amid expectations that a Norwegian oil strike would end soon. There are also unconfirmed rumours around of Brazilian corn making its way into southeastern US states.

Wheat: Jul 12 CBOT Wheat closed at USD7.91 1/4, down 31 1/4 cents; Jul 12 KCBT Wheat closed at USD7.89 1/2, down 37 3/4 cents; Jul 12 MGEX Wheat closed at USD9.13 3/4, down 24 3/4 cents. For the week overall Chicago wheat added 52 1/4 cents, Kansas 51 cents and Minneapolis 49 3/4 cents. Weekly export sales of 418,900 MT were in line with trade estimates. Wheat lacks some of the underlying bullish impetus that corn and soybeans have, and is more of a follower than a leader. Black Sea production and exports are expected to be sharply lower in 2012/13 though, and there are some quality concerns emerging over the state of the European wheat crop which is getting far too much rain. Next week's USDA report is more about potential corn and soybean yields this year rather than wheat prospects. Informa peg US all wheat production at 2.287 billion bushels, 23 million down on last month. That's the equivalent of 62.24 MMT which is 1.44 MMT more than the USDA predicted in June. EU-27 wheat production could increase from the 131 MMT forecast last month, although Russia's will probably be reduced from the existing 53 MMT to around 50 MMT. Japan purchased 60,175 MT of Australian milling wheat in a tender today. It would normally buy a combination of US, Australian and Canadian wheat.