Chicago Soybeans Rally As Exports Flood Out

06/12/12 -- Soycomplex: Jan 13 Soybeans closed at USD14.91 1/4, up 12 cents; Mar 13 Soybeans closed at USD14.86, up 12 1/4 cents; Dec 12 Soybean Meal closed at USD458.00, up USD4.80; Dec 12 Soybean Oil closed at 50.87, up 21 points. Weekly export sales of 1.14 MMT were more than double trade estimates of 300-500 TMT and between 4-5 times larger than the volume required to hit the USDA's 2012/13 export target. Actual weekly shipments of 1.55 MMT comfortably beat 1 MMT for the tenth week in a row as all this business gets squeezed into the front end of the marketing year. The US has already exported 16.4 MMT of soybeans just 13 weeks into the 2012/13 season, with outstanding sales of a further 12 MMT that means that they have 78% of the USDA's target for the marketing year shipped or on the books already. At this rate the South American crop can't come soon enough - if the US continue to sell beans at this week’s pace then they will hit USDA export target just 7 weeks from now. The recent surge in soyoil sales means that the US already has commitments in excess of the USDA's projected total for the entire season. Conab estimated Brazil's 2012/13 soybean crop at 82.6 MMT versus their previous estimate of 80–83 MMT, the USDA's 81 MMT and last year's 66.5 MMT. They pegged Brazilian soybean exports at 36.4 MMT, which is roughly equal to those of 2011/12 and 1 MMT less than the USDA currently predict. "Showers increased across south central Brazil over the past few days, resulting on some notable improvements in moisture across central and northwestern Rio Grande do Sul, western Santa Catarina, and southwestern Parana. Additional improvements are expected in these areas over the next ten days, which will continue to improve conditions for corn and soybean growth," say MDA CropCast.

Corn: Dec 12 Corn closed at USD7.47 3/4, down 5 1/2 cents; Mar 13 Corn closed at USD7.51 1/2, down 6 1/4 cents. Weekly export sales of 51,600 MT for the 2012/2013 marketing year were very poor compared to the 300-500 TMT that the trade was expecting, prompting the funds to finish the session as net sellers of an estimate 6,000 lots. Year-to-date commitments are little more than half of where they were a year ago and this week's total falls well short of the 435 TMT/week pace needed to match the USDA's 2012/13 export target of 31 MMT. China was confirmed as a buyer of 109 TMT of these weekly sales, although essentially this was material switched from "unknown" as previously reported. Conab tweaked their 2012/13 Brazilian corn crop estimate to 71.9 MMT versus their previous estimate of 71.55–72.85 MMT 73 MMT last year and the USDA's 70 MMT forecast. Exports were placed at 20.5 MMT versus a previous estimate of 17.5 MMT and 21 MMT from the USDA. Argentina is seen turning drier Friday and across the weekend, which should allow for some advancement with corn plantings. Better than expected rains in southern Brazil should be helpful for newly planted corn there.

Wheat: Dec 12 CBOT Wheat closed at USD8.45 1/4, up 3 cents; Dec 12 KCBT Wheat closed at USD8.98, up 5 cents; Dec 12 MGEX Wheat closed at USD9.17 1/4, up 2 1/4 cents. Weekly export sales for wheat of 353,100 MT were in line with expectations, but hardly spectacular and below the 511 TMT required to hit USDA targets. Still, there is a feeling that things will start to pick up in the second half of the season, as evidenced by a strong showing in last weekend's Egyptian tender. The weekend weather forecast for wheat on the US Plains now carries less promise of anything more than scattered, light showers rather than the decent rain event that was being touted by some earlier in the week. Following an unseasonably warm spell Russian wheat is looking exposed and vulnerable heading into winter. A story on Bloomberg today said that Russia is heading for the coldest winter in 20 years. Ukraine is said to have already exported more wheat than the "informally" agreed limit between the government and shippers of 5.5 MMT. Despite US wheat appearing to be competitively priced on the world stage Europe granted the most wheat export licenses this week since September 2010.