Chicago Rallies As Funds Step In

30/01/13 -- Soycomplex: Mar 13 Soybeans closed at USD14.78 3/4, up 27 cents; May 13 Soybeans closed at USD14.67 1/2, up 27 3/4 cents; Mar 13 Soybean Meal closed at USD432.70, up USD9.00; Mar 13 Soybean Oil closed at 52.60, up 89 points. Funds were said to have been keen buyers at a net 9-10,000 beans and 3-4,000 each on meal and oil. South American weather has the market's attention, with the continuing theme being too wet in the early harvest areas of northern Brazil and too dry in the south of the country and across into Argentina. Lanworth Inc cut their estimate for Argentine soybean production from 55.2 MMT to 53.1 MMT (vs 54 MMT from the USDA). They did however up their Brazilian estimate to 80.9 MMT versus a previous estimate of 79.4 MMT. El Tejar - the world’s largest grain producer - estimated Brazil’s soybean crop at 80-81 MMT, and Argentina's at 50 MMT. The USDA announced the sale of 175 TMT of US new crop beans to China, underlying continued strong demand from that quarter. Oil World estimated China’s 2012/13 oilseed imports at 65.3 MMT versus 63.1 MMT in 2011/12. Oil World said that Canadian farmers would cut their canola plantings by more than a million hectares to 7.7 million, wooed away by wheat. Trade estimates for tomorrow's weekly export sales report are 600-900 TMT.

Corn: Mar 13 Corn closed at USD7.40 1/4, up 10 3/4 cents; May 13 Corn closed at USD7.41, up 11 cents. Funds were also active corn buyers on the day, taking an estimated net 10,000 contracts. That was despite the fact that the latest weekly ethanol production data showed a decline of 22,000 barrels/day on last week to 770,000bpd - a new lowest weekly total since they starting issuing data in mid-2010. That's the third week in a row that the weekly grind has failed to keep pace with the level required to hit the USDA's projection of 4.5 billion bushels of corn going into the ethanol sector this season. South American weather concerns usurped that news however. Lanworth cut their Argentine corn production estimate to 25.6 MMT from 26.0 MMT previously (and the USDA's 28.0 MMT forecast). For Brazil they went 75.8 MMT versus a previous estimate of 75.5 MMT. El Tejar estimated Argentina’s corn crop at 24-25 MMT. Bloomberg reported that as many as 126 vessels are waiting to load 6.2 MMT of grains in Brazil (versus 72 ships and 2.8 MMT this time last year) as the early soybean harvest clashes with attempts to still export what's left of last year's bumper corn crop. Trade estimates for tomorrow's weekly export sales report are 200-400 TMT.

Wheat: Mar 13 CBOT Wheat closed at USD7.87, up 10 cents; Mar 13 KCBT Wheat closed at USD8.40 3/4, up 10 cents; Mar 13 MGEX Wheat closed at USD8.69, up 8 cents. Funds were said to have been net buyers of around 2,000 Chicago wheat contracts on the day. Lanworth estimated the 2013/14 US wheat crop at 52.8 MMT, unchanged from previous estimate and 14.5% down on last year. They also estimated the 2013/14 Russian wheat crop at 49.9 MMT, up 32% on last year, and Ukraine's output at 23.0 MMT, up 48% on last year. Both figures were unchanged from their previous estimates. Russia’s state weather forecaster said 9.5% of the winter grain crop is in poor condition versus 12% a year ago and 8% on average. Russia’s Ag Minister estimated the 2013/14 grain crop at 95.0 MMT, up 34% versus 70.7 MMT in 2012/13. He also estimated 2013/14 grain exports at 15-20 MMT versus 14.0 MMT in 2012/13. Of the current season's reduced projection of 14.0 MMT around 96% has already been shipped. Trade estimates for tomorrow's weekly export sales report are 300-550,000 MT. Sales of around 435,500 MT are needed to keep pace with the current USDA target. India continues to release wheat onto the international market. South Korea bought 55 TMT of what was probably Indian feed wheat overnight. Other parcels are currently on offer for Mar/Apr shipment.