Chicago Closing Comments - Thursday

17/01/13 -- Soycomplex: Mar 13 Soybeans closed at USD14.30 1/4, down 6 1/4 cents; May 13 Soybeans closed at USD14.14 3/4, down 6 1/2 cents; Mar 13 Soybean Meal closed at USD414.00, down USD5.10; Mar 13 Soybean Oil closed at 51.49, up 18 points. Weekly export sales of 1.6 MMT (plus a further 118 TMT of new crop) were a marketing year high and easily beat expectations of 550-750 TMT. China took 845,600 MT of the old crop. On top of that there was an additional 126 TMT of optional origin sales to China AND a further 240 TMT of new crop sold to "unknown" reported under the daily reporting system. Not even including the latter, this takes total US commitments for 2012/13 to a staggering 89% in a marketing year that doesn't end until August. The market seems strangely relaxed about this, confident in the knowledge that a monster South American crop is coming to save the day. Exports topped 1 MMT for a record 16th week in a row as beans continue to pour out of America, mostly in the direction of China. Rains across northern Brazil "remained abundant" in the past week, according to MDA CropCast, and should "remain extensive across northern areas this week" they add.

Corn: Mar 13 Corn closed at USD7.24 1/2, down 6 3/4 cents; May 13 Corn closed at USD7.25 1/4, down 6 cents; Weekly export sales of 393,300 MT were in line with trade forecasts of 250-475 TMT. That takes total commitments t0 55% of the recently reduced USDA target compared to the five year average of 61%. It says a lot about export demand for corn that this weekly total was the highest since September. The trade will also be nervous about domestic demand for corn following yesterday's data showing weekly ethanol production as the lowest since at least mid-2010. News today of two more US ethanol plants taking downtime due to "an unusually unfavourable market for a fairly long period of time" highlight how bad margins have got. Strategie Grains said that EU corn output is set to rebound 15% from last year's disappointing harvest to 64.9 MMT. Rains in northern Brazil will "improve conditions for soybeans and second crop corn germination, but will continue to slow drydown and harvesting of first crop corn," said MDA CropCast. The IGC upped their 2012/13 world corn production estimate by 15 MMT to 845 MMT, although that is still below the USDA's 852 MMT. Agro Consult estimated Brazil’s 2012/13 corn crop at 74.7 MMT, substantially higher than the USDA's forecast of 71 MMT.

Wheat: Mar 13 CBOT Wheat closed at USD7.81 1/4, down 3 3/4 cents; Mar 13 KCBT Wheat closed at USD8.37, down 5 1/2 cents; Mar 13 MGEX Wheat closed at USD8.69 1/4, down 2 1/4 cents. The USDA announced weekly export sales of 536,200 MT for 2012/13 plus a further 38,500 for 2013/14. That beat expectations for sales of 275-425 TMT and also topped the amount required to hit the USDA's target for the full 2012/13 season (around 435,500 MT). Significantly, the old crop sales included 146 TMT to Egypt, 112 TMT to China and 81 TMT to unknown. Iraq bought 250 TMT of Australian wheat, along with 50 TMT of Canadian wheat in it's latest tender. Concerns are mounting over the health of the US winter wheat crop. "Drought covers approximately 92% of the central and northern Plains, 56% of the southern Plains and Delta, and 53% of the Midwest," said MDA CropCast. "Minor improvements (are expected) across the Delta and far eastern Midwest later next week, but dry conditions across the central and western Midwest and Plains will allow extreme to exceptional drought conditions to continue there through the next ten days," they add.