Chicago Closing Comments - Friday

01/02/13 -- Soycomplex: Mar 13 Soybeans closed at USD14.74 1/4, up 5 3/4 cents; May 13 Soybeans closed at USD14.65 1/2, up 5 3/4 cents; Mar 13 Soybean Meal closed at USD428.20, up USD1.80; Mar 13 Soybean Oil closed at 52.99, up 13 points. For the week nearby beans were up 33 1/4 cents, with meal up USD11.80 and oil rising 89 points. Fund buying in beans was estimated at around 2,000 lots on the day. Yesterday's bullish export numbers added a bit of follow-through positivity for the soycomplex today, despite weakness in corn and wheat. Informa Economics estimated the Brazilian soybean crop at 84 MMT and Argentina's at 54.5 MMT. Both forecasts are a bit higher than the USDA's 82.5 MMT and 54.0 MMT January estimates. The USDA will issue revised forecasts next week. Until then South American weather developments will dominate proceedings. Light showers are forecast in Argentina today and tomorrow before dry weather returns Sunday. Southern Brazil should be in for rain, respected analyst Michael Cordonnier says that these rains are "critical" as the last good rain in the north-central part of Rio Grande do Sul was January 3rd. To highlight just how tight spot soybean availability is right now in South America the Brazilian Trade Ministry report that January soybean exports were just 284 MT versus just over 1 MMT in January 2012. CNGOIC estimated China’s March bean ending stocks at 4.0 MMT, down 35% on 6.2 MMT a year ago. They see Q2 soybean imports rising to 15.0 MMT from 11.6 MMT in Q1 as South American supplies come on stream. Vietnam bought 40 TMT US meal for March shipment along with 80 TMT of Argentine meal for April shipment, they are said to be still shopping for more.

Corn: Mar 13 Corn closed at USD7.36, down 4 1/2 cents; May 13 Corn closed at USD7.37 3/4, down 4 1/4 cents. For the week as a whole that pegs Mar 13 corn up 15 1/4 cents. Funds were said to have been net sellers of around 5,000 contracts on the day. Informa pegged Brazil's corn crop at 70.3 MMT and Argentina's at at 25 MMT. Both those are a little lower than the USDA's 75 MMT and 28 MMT respectively. The USDA's Argentina attaché estimated the corn crop there at 27.5 MMT. Unlike soybeans, there's still plenty of corn left to export in Brazil. The Trade Ministry placed January exports at 3.37 MMT versus 2.79 MMT in December and up dramatically on 846,900 MT in January 2012. The US Energy Dept say that 36 US ethanol plants are currently idle, accounting for around 15% of national capacity. Meanwhile cattle numbers as of Jan 1st were said to be the lowest since 1952 at 89.3 million head. Neither of those two bits of news bode well for US corn demand. Whether the forecast South American weekend rains deliver will decide where the market goes on Monday. "Scattered showers have occurred in Argentina the past 36 hours, but a dry forecast is set to resume in the next 7 days. Recurring high pressure continues to have a stabilizing effect on Argentina weather. Brazil's two southernmost farm states (Rio Grande do Sul and Parana) are expecting scattered showers with the same cool front that triggered rainfall in Argentina, moving up from the south. The Brazil forecast is somewhat wetter than indicated yesterday, especially in Parana, where 1-1.5 inch rains are now predicted. Southern Brazil has grown progressively drier, along with Argentina, with much below-normal January rainfall," say Martell Crop Projections.

Wheat: Mar 13 CBOT Wheat closed at USD7.65, down 14 1/2 cents; Mar 13 KCBT Wheat closed at USD8.22, down 15 3/4 cents; Mar 13 MGEX Wheat closed at USD8.51 3/4, down 13 1/4 cents. For the week Mar 13 Chicago wheat was 11 1/2 cents lower, with Kansas down 7 1/2 and Minneapolis falling 13 1/4 cents, with all of those losses coming today. Fund selling in Chicago wheat today was estimated at around 5,000 contracts. There's talk that the Russian Prime Minister is to hold a meeting next week to discuss suspending the 5% grain import tax until August 1st 2013. Egypt announced a late wheat tender, the US should stand a good chance of being successful in that. India keep picking up business from Asia, the Middle East and Africa. Yesterday's US weekly export sales fell short of the level required to hit the USDA's projected target for 2012/13. There was some talk last month that the USDA may decide to lower that projection in the January report, although they subsequently didn't. Maybe they will do so in the February report due next Friday? South Korea bought 35 TMT of Australian noodle quality wheat for April shipment along with 55 TMT of new crop Ukraine wheat. The USDA attaché in Argentina estimated the wheat crop at 10.3 MMT. Informa went even lower coming out with a forecast of 9.5 MMT, which falls in the middle of estimates from the Rosario Grain Exchange (9.3 MMT) and the Buenos Aires Grain Exchange (9.8 MMT). The USDA attaché forecast Argentine wheat exports at a 24-year low of just 4.3 MMT. Theirs is not just a volume issue but also one of quality this season. The Ukraine Ag Ministry said Ukraine exported 16.3 MMT of grains between July and the end of January, up 47% from 11.07 MMT a year ago. That total included 6.14 MMT of wheat, 7.89 MMT of corn and 1.98 MMT of barley. That should draw a line under wheat exports until new crop, the prospects for which look very good at the moment.