Chicago Market Ends Lower Ahead Of Election/USDA Report

05/11/12 -- Soycomplex: Nov 12 Soybeans closed at USD15.04 1/4, down 22 3/4 cents; Jan 13 Soybeans closed at USD15.03 1/4, down 23 1/2 cents; Dec 12 Soybean Meal closed at USD464.50, down USD5.80; Dec 12 Soybean Oil closed at 49.32, down 94 points. The market tumbled lower as funds sold an estimated 5,000 soybean contracts on the day, further lightening their length ahead of tomorrow's US Presidential Election. The trade is also nervous ahead of Friday's upcoming WASDE report from the USDA which is expected to increase US soybean production and 2012/13 ending stocks. Allendale released their estimated today pegging the crop at 2.869 billion bushels with ending stocks at 137 million bushels versus the USDA's 2.86 billion and 130 million last month. The average trade guess for Friday is 2.892 billion and 133 million respectively. Weekly export inspections were strong once again at 59.44 million bushels, with only 21.7 million needed to match the USDA's targeted total for the season. Brazil only exported 907 TMT of soybeans in October, 46% down on September and 36% lower than Oct 2011 as supplies there run out. MDA CropCast lowered their world oilseed production estimate by 340 TMT thanks to a corresponding cut to projected Brazilian output due to dryness in the north of the country. They now go for a Brazilian crop of 80.33 MMT in 2012/13, CONAB are out with their latest estimate on Thursday, the USDA said 81 MMT last month. After the close the USDA said that 93% of the US soybean crop was now harvested versus 86% normally.

Corn: Dec 12 Corn closed at USD7.35 1/2, down 4 cents; Mar 13 Corn closed at USD7.38, down 4 1/2 cents. Funds were said to have been net sellers of around 4,000 corn contracts on the day. Spec money is now said to have it's smallest corn long since mid-July. Weekly export inspections were 14.7 million bushels versus expectations of 16-21 million and the almost 23 million needed to hit USDA targets. Allendale estimated the US corn crop at 10.618 billion bushels versus 10.706 billion from the USDA last month. US 2012/13 ending stocks were placed at 736 million, significantly higher than the USDA's 619 million, reflecting the sluggish export pace and slumping demand from the ethanol sector. A Bloomberg survey places the average trade guess for US corn production in Friday's USDA report a little higher than Allendale at 10.670 billion bushels and with ending stocks somewhat lower at 634 million. The USDA attaché in Beijing estimated China’s 2012/13 corn crop at 198 MMT, slightly below the official USDA estimate of 200 MMT, but still their third record corn harvest in a row. Celeres estimated Brazil’s 2012/13 corn crop at 75.62 MMT versus a previous estimate of 76.45 MMT and only 70.0 MMT from the USDA. MDA CropCast lowered their Argentine corn production estimate by 370 TMT to 26.28 MMT due to excessive wetness. The USDA's October estimate was 28.0 MMT. After the close the USDA said that the US corn harvest was 95% complete, well ahead of 71% normally.

Wheat: Dec 12 CBOT Wheat closed at USD8.66, up 1 1/2 cents; Dec 12 KCBT Wheat closed at USD9.09, up 1/4 cent; Dec 12 MGEX Wheat closed at USD9.40, down 1/4 cent. Wheat export inspections fell short of the 15-20 million bushels expected at 14 million. The volume needed to hit the USDA 2012/13 target is over 24 million. The export pace is going to have to pick up significantly in the second half of the season to do that, but it's not impossible given the world supply situation. Allendale pegged US 2012/13 wheat ending stocks at 699 million bushels versus 654 million from the USDA last month. The average trade guess for Friday's report according to Bloomberg is 658 million. On a global level Allendale pegged world wheat inventories at the end of 2012/13 2.1 MMT lower than the USDA at 170.9 MMT, reflecting increased demand at the expense of corn. The state of the US winter wheat crop remains a serious concern. Last week's first crop condition ratings of the season were the worst on record, and tonight they declined even further - with good/excellent down one point to 39% and poor/very poor raised four points from 15% to 19%. Rains in Southern Brazil are said to have hurt wheat quality there, a situation that is likely to be replicated across the border in Argentina where harvesting is only around 10% complete so far.