Chicago Extends Losses On Further Fund Selling

14/02/13 -- Soycomplex: Beans were back on the defensive, although closing well off session lows, with funds dumping an estimated further 3-4,000 lots of their rapidly diminishing length. Weekly export sales of minus 109,200 MT for old crop set the tone. New crop sales were 345 TMT, giving us a combined 235,800 MT - well below trade expectations of 700 TMT-1.1 MMT. The old crop "sales" included decreases for China (230,600 MT) and unknown destinations (146,500 MT). Were these cancellations business being switched to South America, or a result of the sort of thing we frequently see when the market drops sharply in a shory period? Even with these cancellations the US still has 93% of the USDA's target for the year already shipped or on the books. Shipments of 990,651 MT failed by a whisker to extend the unbroken run of 1 MMT+ weeks to twenty as US exports get crammed into the first half of the season. Port congestion in South America is already building. The Buenos Aires Cereals Exchange estimated Argentine soybean crop at 50.0 MMT, versus the USDA's forecast of 53.0 MMT. The January NOPA crush numbers are out tomorrow, with the trade expecting little sign of an ease up in domestic US demand for beans. The December crush was almost 160 million bushels, with a similar number expected again versus the Jan 2012 crush of 142.8 million. Mar 13 Soybeans closed at USD14.18, down 5 cents; May 13 Soybeans closed at USD14.08 1/2, down 5 cents; Mar 13 Soybean Meal closed at USD407.20, down USD0.90; Mar 13 Soybean Oil closed at 51.70, up 4 points.

Corn: Corn was little changed on the day. Weekly export sales of 225,400 MT of old crop and 59,300 MT of new crop were in line with trade expectations of 150-350 TMT. Even so the pace of exports is still behind that needed to meet the USDA's current 2012/13 projections. Sales included 102,600 MT of old crop to China. Fund selling was estimated at around 2-3,000 contracts on the day. The Buenos Aires Cereals Exchange estimated the Argentine corn crop at 25.0 MMT versus the USDA's figure of 27.0 MMT. South Korea NOFI bought 108 TMT of South American corn for July shipment along with 55 TMT of feed wheat of optional origin, possibly Indian, for June shipment. MDA CropCast raised their Brazilian corn production estimated almost 400 TMT from last week to 71.8 MMT versus 72.5 MMT from the USDA. They also increased production in Mexico this year by 300 TMT to 20.8 MMT. Output in Argentina was left unchanged at 23.1 MMT, like the BAGE also well below the USDA's forecast. Mar 13 Corn closed at USD6.94 3/4, down 3/4 cent; May 13 Corn closed at USD6.92 3/4, down 3/4 cent.

Wheat: Fund selling in Chicago wheat was estimated at around 2,000 contracts on the day. As with soybeans, wheat closed lower but well off the lows of the day. Weekly export sales actually topped those of corn and soybeans combined at 651,700 MT of old crop and 54,600 MT of new crop. Trade expectations has been for sales of 275-400 TMT. Weekly sales for old crop now need to average around 550 TMT for the remainder of the season to hit USDA targets. There was no sign of Brazil, Russia or the UK, but we did get the confirmation of one cargo of old crop sold to China. This still doesn't mean that the recently rumoured old crop business to some of these other unusual homes hasn't been done though. Total commitments to date are now 76% of the USDA target for the season versus 89% normally. Interfax said that 10.5% of Russia’s winter grain crop is in poor condition versus 9% on average. Kazakhstan's Ag Ministry said that they have exported 4.4 MMT of grains so far this season versus 6.5 MMT a year ago. Mar 13 CBOT Wheat closed at USD7.32, down 3 1/2 cents; Mar 13 KCBT Wheat closed at USD7.75, down 5 1/4 cents; Mar 13 MGEX Wheat closed at USD8.19 1/4, down 3 3/4 cents.