Chicago Drifts Lower As Long Weekend Looms

31/08/12 -- Soycomplex: Sep 12 Soybeans closed at USD17.64 1/2, down 5 3/4 cents; Nov 12 Soybeans closed at USD17.56 1/2, down 7 cents; Sep 12 Soybean Meal closed at USD547.10, down USD1.00; Sep 12 Soybean Oil closed at 56.42, down 17 points. For the week that left Sep 12 beans 27 cents higher, with new crop Nov 12 up 25 cents. Sep 12 Meal gained USD13.70 and Sep 12 oil added 18 points. Funds were estimated as net sellers of around 4,000 soybean contracts on the day, which would still place them adding around 6,000 lots to their net length on the week. It was a pretty predictable profit-taking session ahead of the long 3-day holiday weekend. Heavy rains from the remnants of Hurricane Isaac, now downgraded to a tropical storm, are working their way northwards into the Midwest. That may benefit a few late-planted second cropped soybeans, but aren't thought likely to be of much benefit to the vast majority of the rest of the crop at this stage. One month earlier they would potentially have been a whole lot more useful. World demand for soybeans remains strong. China sold all the 400 TMT of soybeans it offered up for auction onto the domestic market for the second time in a fortnight yesterday. AgRural estimated Brazil's 2012/13 soybean crop at a record 82 MMT, 23.5% higher than this year. Planting in the top producing state of Mato Grosso begins in just over a fortnight.

Corn: Sep 12 Corn closed at USD8.02 3/4, down 8 3/4 cents; Dec 12 Corn closed at USD7.99 3/4, down 8 3/4 cents. Profit-taking ahead of the long weekend saw Sep 12 corn finish up just 1/2 cent on the week, with Dec 12 down 8 3/4 cents. There may also have been an element of caution ahead of Federal Reserve Chairman Ben Bernanke's speech in Jackson Hole. Fund selling was estimated at 8,000 contracts on the day, making them net sellers for seven of the last eight session, during which time they've liquidated around 44,000 contracts. In addition to soybeans, China now say that they will sell corn from state-owned reserves, although they did not say when or how much they will auction. International demand for US corn remains sluggish, with those that can switching to feed wheat and others looking for cheaper origin corn. Spillover weakness from wheat, following the news that there was to be no Russian grain export ban, at least not for now, added to corn's demise on the day. The EU Commission estimated the EU-27 2012/13 corn crop at 60.2 MMT versus their previous estimate of 61.7 MMT and 65.4 MMT last year. Rains from Tropical Storm Isaac will hinder corn harvesting this weekend.

Wheat: Sep 12 CBOT Wheat closed at USD8.70, down 13 1/2 cents; Sep 12 KCBT Wheat closed at USD8.80 3/4, down 9 cents; Sep 12 MGEX Wheat closed at USD9.31 3/4, down 8 1/4 cents. Chicago wheat was 2 1/2 cents higher for the week, with Kansas up 4 1/2 cents and Minneapolis adding 13 1/4 cents. Wheat fell on disappointment that there was no announcement of export restrictions from Russia, with funds selling an estimated 3,000 CBOT wheat contracts on the day. As with corn, we have seen steady wheat selling over the past eight sessions, with funds only featuring as net buyers once in that period (as opposed to four times for soybeans). The results of the Saudi tender for 550 TMT of hard wheat are not yet released onto the market. It is possible that the US will pick up a share of the business. Egypt's GASC announced its fourth wheat tender in three weeks after the market closed, asking for an unspecified amount of soft wheat for Oct. 11-20 shipment. Russian and Romanian wheat won last weekend's tender. Russia's wheat crop is now seen in the region of 38-40 MMT versus 56.2 MMT in 2011.