Chicago Market Modestly Lower Wednesday

01/08/12 -- Soycomplex: Aug 12 Soybeans closed at USD16.82 1/4, down 38 3/4 cents; Nov 12 Soybeans closed at USD16.29, down 12 cents; Aug 12 Soybean Meal closed at USD537.20, down USD7.50; Aug 12 Soybean Oil closed at 51.73, down 82 points. Funds were said to have been net sellers of around 6,000 soybean contracts on the day. Outside markets offered little support, with the US Federal Reserve saying that America's economic recovery had lost momentum, although they didn't seem to think that any further economic stimulus was warranted at this stage. FCStone forecast a 2.730 billion bushel harvest with an average yield of 36.2 bu/acre versus the USDA's forecast yield of 40.5 bpa. Weather forecasts offer conflicting chances of precipitation, soaking rains could still produce a half decent soybean crop should they arrive but time is running out. Weekly soybean export sales tomorrow are expected to be in the region of 250-450 TMT.

Corn: Sep 12 Corn closed at USD8.00 1/2, down 6 cents; Dec 12 Corn closed at USD8.00 1/2, down 4 3/4 cents. Fund selling was estimated at 5,000 contracts on the day. The consensus of opinion is that rains now would do little, if any good for corn. The only question now is how small is this US crop going to be? A Reuters survey yesterday said 11.166 billion bushels from within a range of estimates of 10.5-11.823 billion and versus the USDA estimate of 12.970 billion and 2011 production of 12.358 billion. That would represent a drop of almost 9% despite an increase in plantings. Momentum seems to be gathering for some political intervention to reduce the ethanol mandate. Congressmen are holding a press conference on Thursday to urge EPA to reduce the RFS. Export interest is drying up at these levels, and with old crop stocks hard to find. Trade estimates for tomorrow's weekly export sales are between zero and 250 TMT. Last week's sales were negative for both old and new crop you may recall, the first time that has happened in more than 20 years.

Wheat: Sep 12 CBOT Wheat closed at USD8.79 1/2, down 8 3/4 cents; Sep 12 KCBT Wheat closed at USD8.84, down 8 1/2 cents; Sep 12 MGEX Wheat closed at USD9.38, down 15 3/4 cents. Fund selling was estimated at 2,000 Chicago contracts on the day. Russia’s Prime Minister said that Russia will NOT curb wheat exports, although the government still plans to meet on August 8th to discuss the issue. Some reports suggest that they have said that they will not be introducing export tariffs either. Algeria bought 400-500 TMT of unconfirmed origin wheat, thought to be French, at levels that calculate out as being well below US offers. Early Canadian winter wheat yields are said to be coming in at 80-100 bushels per acre versus typical yields of 65-70 bushels per acre. Estimates for tomorrow's weekly export sales report are 400-600 TMT.