Chicago Closing Comments

02/10/12 -- Soycomplex: Nov 12 Soybeans closed at USD15.30 1/2, down 29 3/4 cents; Jan 13 Soybeans closed at USD15.33 1/4, down 29 3/4 cents; Oct 12 Soybean Meal closed at USD463.40, down USD11.20; Oct 12 Soybean Oil closed at 50.27, down 45 points. Funds were estimated sellers of around 9,000 soybean contracts on the day, and so we move lower, it's as simple as that. Harvest pressure was cited as being the primary factor behind recent fund selling, along with continued talk of significantly better than expected yields, driving beans to fresh 3-month lows. Soybean harvesting moved rapidly forward reaching 41% complete as of Sunday night, compared to 19% on average. "Eighty-five percent of soybeans were shedding leaves indicating rapidly advancing maturity. Growers are inspired to get soybeans out of the field as quickly as possible, since drying pods are prone to shattering, spilling soybeans to the ground where they would be un-recoverable," said Martell Crop Projections. It is "normal" for beans to trade seasonally lower at this time of year, in fact it is worth noting that in each of the past 4 years, beans have bottomed during first week of October, according to Benson Quinn Commodities.

Corn: Dec 12 Corn closed at USD7.58 1/4, up 1 1/2 cents; Mar 13 Corn closed at USD7.59 3/4, down 1/4 cent. Funds were said to have been modest net buyers of around 3,000 corn contracts on the day. There's some talk of corn yields also improving as the harvest progresses past halfway, but only modestly so compared to soybeans. FCStone came out with a corn yield estimate of 123.9 bu/acre and a crop of 10.824 billion bushels versus last month's USDA forecast of 122.8bpa and 10.727 billion bushels. "The very dry conditions promoting rapid harvesting are a mixed blessing, as persistent drought is a major worry for next year’s corn potential. Corn relies on stored ground moisture that is replenished during the fall and winter. Without a good base of subsoil moisture, the crop is prone to summer drought," said Martell Crop Projections. Corn production in the EU is seen around 10 MMT down on last year to 55 MMT, with the most significant crop losses in the east. Output in Hungary is now only forecast at 5.2 MMT by the IGC, versus 8.1 MMT in 2011/12, and Romania's crop is seen at just 6.5 MMT versus 10.5 MMT a year ago.

Wheat: Dec 12 CBOT Wheat closed at USD8.71 1/2, down 12 3/4 cents; Dec 12 KCBT Wheat closed at USD8.92 1/4, down 14 3/4 cents; Dec 12 MGEX Wheat closed at USD9.24 1/4, down 13 1/4 cents. Fund selling was placed at 3,000 Chicago wheat contracts on the day. Egypt are back testing the water and tendering for an unspecified volume of wheat, this time for Dec 11 to 20 delivery - their furthest forward purchase yet. As ever it will be interesting to see how the various origins line up, although it would be a surprise to see US wheat feature. Russia's Deputy Agriculture Minister said that the government is to consider selling off part of it's 5 MMT of wheat intervention stocks to local flour millers in Siberia, the Urals and the far east of the country as early as this week. In its long-term winter weather outlook MDA CropCast said that what rainfall is around "should be most abundant in the southern Plains, although an upturn in precipitation is also expected across the central Plains this winter. The upturn in showers in the central Plains should finally begin to replenish moisture for winter wheat."