Chicago Soybeans Crash Following USDA Report

Corn: Mar 13 Corn closed at USD7.09, down 1 3/4 cents; May 13 Corn closed at USD7.08 3/4, down 3 1/4 cents. For the week as a whole that puts corn 27 cents lower. Net fund selling on corn on the day was estimated at 5-6,000 lots. The USDA raised US corn ending stocks by more than anticipated, up by 30 million bushels from last month to 632 million. That came courtesy of a 50 million bushel reduction in US corn exports and a 20 million increase in domestic feed usage. US corn exports in 2012/13 are now placed at 24 MMT, down 38% on last season's 38.4 MMT. America's loss in Brazil's gain, with their exports forecast 2 MMT higher this month at 24.5 MMT - they are now seen as the world's largest corn exporter in 2012/13 - bigger even than the US. If they so prove to be then it will be interesting to see how their infrastructure copes, especially given that the USDA is also predicting that they will export 38.4 MMT of soybeans as well in 2012/13. Brazil's corn crop was increased 1.5 MMT to 72.5 MMT versus the average trade guess of 71.1 MMT and marginally behind last year's record 73.0 MMT production. The Argentine corn crop wasn't dropped by as much as anticipated, only being lowered 1 MMT to 27.0 MMT. World ending stocks were raised more than expected to 118.0 MMT, with the majority of that likely to be in Brazil. Corn consumption in Europe was raised 2 MMT to 66 MMT, with imports also up 2 MMT to 10 MMT. China's corn consumption was raised 0.5 MMT to 208.5 MMT, and their imports were increased a similar amount to 2.5 MMT. Egypt and Mexico saw their import requirements lowered.
Wheat: Mar 13 CBOT Wheat closed at USD7.56 1/4, up 1/4 cent; Mar 13 KCBT Wheat closed at USD7.99 3/4, down 1 1/4 cents; Mar 13 MGEX Wheat closed at USD8.36 1/4, down 3 cents. For the week that places Chicago wheat 8 3/4 cents lower, with Kansas down 22 1/4 cents and Minneapolis falling 15 1/2 cents. The USDA lowered US wheat export potential, although only slightly, from 29.5 MMT to 29.0 MMT. There was a noticeable shift class in the exports, with HRW down 25 million bushels to 425 million and SRW up 25 million to 160 million. Given the recent subdued pace of US exports hitting this target looks ambitious, weekly volumes will have to move up a gear or two for the remainder of the season. There is still export competition out there, EU exports were raised 0.5 MMT to 18.5 MMT and so too were India's to 8.5 MMT. Brazil's wheat crop was cut 0.5 MMT to 4.3 MMT, although their imports were left unchanged. Increased domestic feed usage of wheat in the US saw ending stocks fall 25 million bushels to 691 million, contrary to trade expectations for a small increase to 728 million. World ending stocks were barely changed at 176.7 MMT, a little higher than the average trade guess of 175.5 MMT. Ukraine's 2012 wheat crop was raised from 15.5 MMT to 15.76 MMT, whilst Kazakhstan's was reduced from 10.5 MMT to 9.84 MMT.