Chicago Slides On Further Fund Liquidation
04/01/13 -- Soycomplex: Jan 13 Soybeans closed at USD13.89, down 14 cents; Mar 13 Soybeans closed at USD13.67 1/4, down 19 1/4 cents; Jan 13 Soybean Meal closed at USD398.20, down USD7.40; Jan 13 Soybean Oil closed at 49.42, down 79 points. Fund selling was estimated at 6,000 soybean contracts on the day. For the week overall beans were down 35 cents, meal down USD28.50 and oil up 48 points. Beans and meal have both closed lower every day this week. Weekly export sales for soybeans were towards the upper end of trade expectations of 250-450 TMT at 435 TMT for 2012/13, plus 61,400 MT for 2013/14. Considering the recent Chinese cancellations that was a pretty decent performance in a holiday week. So too were weekly exports of over 1 MMT once again, now for a record breaking fourteenth week in row. Informa Economics revised it's 2012 US soybean yield estimate up from 38.6 bu/acre to 40.1 bpa, with production increased from 2.925 billion bushels to 3.04 billion. The USDA, who issue revised estimates next week, currently have yields at 39.3 bpa and production at 2.971 billion bushels. Brazilian production estimates are creeping higher, and with every week that passes a full-swing harvest grows ever closer. Offers of Feb shipment beans from Brazil are now under-cutting those from the US. Argentine plantings meanwhile have caught up at 90% complete from 84% last week and 89% a year ago.
Corn: Mar 13 Corn closed at USD6.80 1/4, down 9 cents; May 13 Corn closed at USD6.80 3/4, down 10 1/4 cents. For the week overall front month corn was 13 3/4 cents lower. Fund selling was estimated at 8,000 contracts on the day. Weekly export sales were described by one analyst as "pitiful" - even for a holiday week - at just 49 TMT versus trade expectations of 200-350 TMT. Sales need to average around 470 TMT to meet the USDA's export target of 31 MMT this season, and they've only managed to beat that total once so far this marketing year. That would appear to set the stage for a reduction in next week's USDA January WASDE report. Informa Economics raised their 2012 US corn yield estimate from 122.4 bu/acre to 123.3 bpa, and upped production slightly from 10.738 billion bushels to 10.8 billion. The USDA currently project 10.725 billion and 122.3 bpa. If the USDA concur then, along with reduced export potential, we might see an upward revision in US 2012/13 ending stocks in next week's WASDE report. The weekly ethanol grind fell 27,000 barrels/day from the last week taking it below the 825,00 bpd level required to meet USDA targets for 2012/13, although this may be due to holiday factors more than anything else. The recent reinstatement of the blenders tax credit should underpin demand from the ethanol sector going through to the end of the year.
Wheat: Mar 13 CBOT Wheat closed at USD7.47 1/4, down 8 1/4 cents; Mar 13 KCBT Wheat closed at USD8.06 1/4, down 5 cents; Mar 13 MGEX Wheat closed at USD8.42 1/2, down 4 cents. Front month CBOT wheat was down 31 1/2 cents on the week, with Kansas wheat down 19 3/4 cents and Minneapolis falling 25 1/4 cents. Fund selling in CBOT wheat was placed at 4,000 lots. Trade ideas that fund rebalancing next week will constitute buying of Kansas wheat and selling of Chicago wheat supports the former relative to the latter. Weekly export sales of 400 TMT were in line with trade estimates of 350-550 TMT, but well below last week's bumper 1 MMT plus week. We can maybe forgive that due to seasonal factors, but the trade will be looking for a much stronger showing in the weeks ahead. Year-to-date shipments of 13.35 MMT plus outstanding sales of 5.73 MMT mean that the US currently only has around 65% of the USDA's projected 29.5 MMT target for 2012/13 on the books at this stage, 30 weeks into the marketing year. Some suggest that the USDA may lower this target again next week. Informa Economics cut their Argentine wheat production estimate to 9.5 MMT, some 2 MMT less than the USDA's December forecast. The USDA currently have Argentina down to export 7.5 MMT of wheat in 2012/13, which is beginning to look like an extremely tall order.
