Chicago Closing Comments - Friday

05/04/13 -- Soycomplex: Now that the post-USDA panic has died down the market is looking for something else to worry about. News that the death toll from bird flu in China has now risen to six people is providing it, for the soybean market at least, with funds selling an estimated net 5,000 bean contracts on the day. Rising tensions in North Korea is another external factor encouraging a bit more "risk off" mentality. Today's Commitment of Traders report shows managed money cutting 31% off their net long position in soybeans on the week through to Tuesday. The Buenos Aires Grains Exchange estimate this year's soybean harvest in Argentina at 9.1% complete, and have the crop at 48.5 MMT, unchanged from their previous estimate, but up 21% on last year. Even as the Argentine soybean harvest starts to get going in earnest, growers there are reluctant sellers due to government taxes, inflation and the declining peso vs US dollar exchange rate (in real terms). The Rosario’s Grains Exchange say Argentine farmers have sold only 10.1 MMT of new crop soybeans versus 15.3 MMT a year ago. On the day May 13 Soybeans closed at USD13.61 3/4, down 10 1/4 cents; Jul 13 Soybeans closed at USD13.43 3/4, down 8 cents; May 13 Soybean Meal closed at USD391.80, down USD5.30; May 13 Soybean Oil closed at 48.83, up 28 points. For the week May 13 beans fell 43 cents, with May 13 meal down USD12.80 and May 13 oil down 128 points.

Corn: Private exporters reported the sale of 120,000 MT of new crop corn to unknown, the USDA said. Malaysia seeks 120 TMT of optional origin corn for June shipment. The Buenos Aires Grains Exchange said that the Argentine corn harvest is 24.3% complete, up from 17.3% a week ago. They estimated the crop at 25.0 MMT, unchanged from their previous estimate but up 16% on last season. Argentina's Ag Ministry said that the corn harvest is 31% complete versus 28% a year ago. There appear to be problems with aflatoxin in Ukraine corn, with the Dutch feed industry advising members not to use it in dairy rations. A Ukraine agriculture inspector predictably said that all 2013 corn is free from aflatoxin. The Commitment of Traders report confirmed managed money having liquidated 100,000 corn contracts in the week through to Tuesday. That's more than half of their original length and they are estimated as having been further sellers of 15-20,000 since, including around 3,000 today. There are reports of early corn planting going on in central Illinois. If the weather plays ball there will no doubt be more going in over the weekend. Legendary investor Dennis Gartman apparently said in today’s Gartman letter that given reasonable weather and near normal yields/levels of abandonment then this year's US corn price could fall "well into the $4 range, if not eventually lower." On the day May 13 Corn closed at USD6.29, down 1 cent; Jul 13 Corn closed at USD6.17 3/4, down 3/4 cent. For the week May 13 corn was down 66 1/4 cents, with Jul 13 falling 58 1/4 cents.

Wheat: The wheat marked fared better than corn or soybeans once more, on crop concerns in the US and Europe and talk of increased demand for US wheat from China. There's unconfirmed talk that the Chinese may have bought 10-20 cargoes of US SRW wheat in the past week. Jordan are back in the market again tendering for 100 TMT of optional origin wheat for June/July shipment, although they've rejected all offers on their last two similar recent tenders. Bangladesh are tendering for 50 TMT of optional origin wheat for Apr/May shipment. India will be the favourites to pick up that business, they are said to be considering taking lower prices for up to 5 MMT of wheat to clear some room for new crop. India's MMTC are tendering to sell 50 TMT of wheat from government stocks for May/June shipment. The Taiwan Flour Millers' Association are tendering to purchase 82,330 MT of US milling wheat. The Commitment of Traders report show managed money increasing their net short in wheat for the week through to Tuesday night. On the day funds were estimated to have been net buyers of around 2,000 CBOT wheat contracts. Russia exported 331,000 MT of wheat in January–February versus 1.82 MMT a year previously. The Argentine Ag Ministry estimated their 2012/13 wheat crop at only 9.0 MMT versus the USDA's 11.0 MMT. On the day May 13 CBOT Wheat closed at USD6.99, up 5 cents; May 13 KCBT Wheat closed at USD7.26, up 4 1/4 cents; May 13 MGEX Wheat closed at USD7.87 1/2, up 1 cent. Chicago wheat was up 11 1/4 cents on the week, with Kansas down a cent and Minneapolis up 7 1/4 cents.