Chicago Closing Comments - Tuesday

14/08/12 -- Soycomplex: Sep 12 Soybeans closed at USD16.23 1/2, up 1 1/4 cents; Nov 12 Soybeans closed at USD15.98, down 2 3/4 cents; Sep 12 Soybean Meal closed at USD506.60, up USD1.80; Sep 12 Soybean Oil closed at 52.79, down 31 points. Funds were said to have been modest sellers of around 1,000 soybean contracts on the day. Strong demand for US soybeans is evident not only in robust exports, but also by the July NOPA crush which came in well above expectations of 131 million bushels at 137.4 million, and up almost 12% on July 2011's 123 million. Meal exports at 653,260T were well above June exports of 585,504T and July 2011 exports of 386,812T. With domestic demand for beans at this level it seems clear that the USDA's existing 1.69 billion bushel estimate for the entire 2011/12 crush is too low and will need to be revised higher in future S&D reports. That will cut carry in for 2012/13, further tightening ending stocks for the season ahead.

Corn: Sep 12 Corn closed at USD7.79 3/4, down 3 cents; Dec 12 Corn closed at USD7.89, down 3 1/4 cents. Funds were also modest sellers of around 1,000 corn contracts on the day. Corn seems to be struggling to hold above the USD8/bushel mark. US weather has turned cooler, with Monday's daytime high of 69 F at O'Hare International Airport in Chicago the lowest August high in three years. Rains however are largely confined to the east of the corn belt. Demand for US corn is switching to Brazilian origin material or feed wheat from Australia, India or the Black Sea. Agritel peg the Ukraine corn crop at 19.5 MMT versus 22.0 MMT last year and the USDA's current estimate of 21.0 MMT. Continued talk that this season's historic US drought will enough to persuade the EPA to reduce or waive completely the ethanol mandate seems to be enough to keep the bulls at bay for the time being.

Wheat: Sep 12 CBOT Wheat closed at USD8.39 3/4, down 17 cents; Sep 12 KCBT Wheat closed at USD8.52, down 16 cents; Sep 12 MGEX Wheat closed at USD9.02 3/4, down 8 1/2 cents. Wheat looks the weakest leg of the three, with funds selling an estimated 4,000 Chicago contracts on the day. There was disappointment that Egypt bought Black Sea wheat again for the second time in a week, this time booking one cargo each of Russian and Ukraine wheat in their second tender of 2012/13. US wheat was too expensive to feature once again. Agritel estimated the 2012 Russian wheat crop at 41.5 MMT, down 10% from their previous estimate with wheat exports seen at 8.0 MMT versus a previous estimate of 11.0 MMT. ProAgro estimate 2012/13 Ukraine grain exports at 19.8 MMT versus 23.4 MMT last season. The Ukraine Ministry say that farmers there will plant 8.2 million hectares of winter grains, including 6.6 million ha of wheat, for the 2013 harvest which is down 2.6% on last year.