Chicago Dives On Bearish USDA Data
09/11/12 -- Soycomplex: Nov 12 Soybeans closed at USD14.52, down 47 1/4 cents; Jan 13 Soybeans closed at USD14.51 1/4, down 44 1/2 cents; Dec 12 Soybean Meal closed at USD449.70, down USD13.20; Dec 12 Soybean Oil closed at 47.70, down 100 points. On the week that put Nov 12 beans 75 cents lower, with Dec 12 meal down USD26.20 and Dec 12 oil down 156 points. Funds sold an estimated 8,000 soybean contracts on the day as the market collapsed following a bearish USDA report. The USDA raised US soybean yields from 37.8 bu/acre last month to 39.3 bu/acre this time round. That added 111 million bushels to the US soybean crop this month, giving a 2012 harvest of 2.971 billion bushels versus 2.86 billion in October, and somewhat better than the 2.892 billion that the trade was expecting. That represents a fall of "only" 4% on last season's output. Ending stocks were increased 10 million to 140 million bushels, although that's still a very tight number. US exports were raised again from 34.4 MMT to 36.6 MMT, reflecting the recent frenetic pace of US shipments. China's import requirements were increased 2 MMT to 63 MMT. The USDA didn't make any alterations to South American production for 2012/13, leaving Brazil at 81 MMT and Argentina at 55 MMT. World ending stocks were increased 2.5 MMT to 60 MMT, which is 4 MMT more than last season. The bare numbers don't hide the fact that all of this is totally dependent on Mother Nature not throwing another spanner into the South American works this year. Neither does it hide the fact that none of these new stocks are available outside of the US for a good while yet. The Rosario Grains Exchange said Argentina has planted only 10.8% of their soybean crop versus 25% a year ago.
Corn: Dec 12 Corn closed at USD7.38 3/4, down 2 1/2 cents; Mar 13 Corn closed at USD7.42, down 1 1/4 cents. For the week that puts corn virtually unchanged. Fund selling was estimated at 4,000 corn contracts on the day. The USDA raised US corn production slightly from 10.706 billion bushels last month to 10.725 billion this time round, contrary to a trade expectation of a reduction to 10.629 billion. Yields were increased from 122 bu/acre to 122.3 bu/acre. Harvested acres were left unchanged, although many feel that these will have to be reduced somewhere down the line that probably won't come until January. US corn exports and ethanol usage were left unchanged. The USDA are for now ignoring the possibility of lower corn production in South America in 2013, leaving their Brazilian and Argentine estimates unchanged at 70 MMT and 28 MMT respectively. Brazil's corn exports were raised 2 MMT to 21 MMT. Europe's corn crop was cut 1 MMT to 54.65 MMT and Mexico's was reduced 800 TMT to 20.7 MMT. In separate news, Japan was said to have bought 500,000 MT of US corn overnight due to shipping delays on material coming out of Brazil. There's talk of 900 TMT of Brazilian corn sold to Japan for Jul/Sep shipment getting carried over into the Oct/Dec period. The Rosario Grains Exchange said Argentina has planted 44% of its corn crop versus 58% a year ago. They cut their production forecast to 26-27 MMT from their previous estimate of 28.0 MMT.
Wheat: Dec 12 CBOT Wheat closed at USD8.86 1/2, down 16 cents; Dec 12 KCBT Wheat closed at USD9.22 1/4, up 16 cents; Dec 12 MGEX Wheat closed at USD9.50 1/2, down 8 1/4 cents. For the week that places Chicago wheat 22 cents higher, with Kansas up 13 1/2 cents and Minneapolis 10 1/4 cents higher. Fund selling in Chicago wheat was estimated at 6,000 contracts on the day. The USDA reflected the recent world wheat trade by cutting their forecast for US exports by 1 MMT to 30.5 MMT, whilst Ukraine, Russia and Europe all saw their foreign sales increase by 1-2 MMT. India is also seen grabbing a larger market share of world wheat exports in 2012/13, whilst Australia's is forecast to contract. US ending stocks were increased 50 million bushels from last month to 754 million. World wheat ending stocks, which were expected to fall from 173 MMT to 171.5 MMT, were in fact increased to 174.2 MMT. Wheat production in Russia, Ukraine and Kazakhstan was left unchanged, and Europe's output was even raised slightly from last month thanks to increased output in Poland. The Ukrainian Grain Association estimated November grain exports at 3.0 MMT versus 2.9 MMT in October. They've already exported a record volume of grains in the Jul/Oct period. ABS said Australia exported a record 23.4 MMT of wheat in 2011/12.
