Chicago Markets Lower On The Week

Corn: Dec 12 Corn closed at USD7.48, down 9 cents; Mar 13 Corn closed at USD7.48 1/2, down 8 3/4 cents; Fund selling was estimated at 8,000 corn contracts on the day. Dec 12 corn was 8 1/4 cents lower on the week, with Mar 13 down 11 cents. Outside markets were a negative influence with crude oil falling back below USD90/barrel on global economic concerns adversely affecting demand. Informa placed US corn yields at 127 bpa this year, and the crop at 11.194 billion bushels. Last month's USDA estimates were 122.8 bpa and 10.727 billion bushels. Unlike soybeans, the US has only sold 33% of the USDA's projected 2012/13 target for corn sales. In fact it's eight weeks since the US sold more corn than soybeans in the weekly sales report. That doesn't look like changing too dramatically any time soon, with South American corn offered at USD40-50/tonne cheaper than US corn. Indeed, Brazilian corn is now being successfully imported into the US by several large feed operations. Michael Cordonnier yesterday estimated the Brazilian corn crop at 72-73 MMT versus 72.5 MMT last year and the Argentine corn crop at 26-27 MMT versus 21.0 MMT. So competition from that region looks set to continue throughout 2012/13. Harvest pressure remains, with a record 70% of the US corn crop likely to be in the barn by Sunday night, up from 54% a week ago.
Wheat: Dec 12 CBOT Wheat closed at USD8.57 1/2, down 11 3/4 cents; Dec 12 KCBT Wheat closed at USD8.78 3/4, down 8 cents; Dec 12 MGEX Wheat closed at USD9.19 1/2, down 6 3/4 cents. On the week Chicago wheat was 49 cents lower, with Kansas wheat down 48 3/4 cents and Minneapolis losing 39 cents. The USDA attaché in Australia fell into line with just about everybody else (except the USDA themselves), placing the wheat crop there at 21 MMT - the USDA will surely change their forecast of 26 MMT next week? The Commonwealth Bank of Australia forecast wheat exports the at 17.8 MMT in 2012/13 versus 24.9 MMT in 2011/12 and the ABARES estimate of 21.5 MMT and the USDA's 21.0 MMT. Russia's Grain Union head said that the country may export 15 MMT of grains in 2012/13, a bit more than the official Ministry estimate of 10-14 MMT. Around 7.5 MMT of that has already been shipped, according to the Grain Union. Russia's Deputy Minister of Agriculture said that the government may begin selling off some of it's grain intervention fund at the rate of 100 TMT/week starting on Oct 23 and lasting through to the end of the year. Potentially that would mean releasing 1 MMT of the 5 MMT currently held onto the market, double the amount originally suggested. The move is aimed at stabilising rapidly rising domestic prices. Ukraine said it had harvested almost 35 MMT of grain off 83% of the planned area, with corn harvesting almost at the halfway point.