Chicago Falls On Broad-Based Commodity Sell-Off

20/06/13 -- Soycomplex: Broad-based selling in commodities spilled over into the ag sector. Gold fell to a 2 1/2 year low following Fed Chairman Ben Bernanke's statement that the QE party is almost over and that financial stimulus, currently running at USD85 billion a month, could cease by mid-2014. The Argentine Ag Ministry estimated the 2012/13 soybean crop there at 50.2 MMT versus 50.6 MMT previously. The Rosario Grain Exchange put Argentine production at 48.3 MMT versus 51.0 MMT from the USDA and 40.1 MMT in 2011/12. The Buenos Aires Grains Exchange said that the Argentine soybean harvest is now complete, they estimate the crop at 48.5 MMT. Weekly US export sales of 52,600 MT of old crop and 108,500 MT of new crop fell short of trade expectations for combined sales of 350-600 TMT. Meal sales of 141,200 MT, of which only 26,600 MT were old crop, were however in line with expectations of 100-200 TMT. Things are warming up on the weather front across the Midwest. "Persistent high pressure would bring the hottest temperatures of the growing season. Peoria Illinois is expecting highs near 90 F starting today and continuing through Wednesday next week. Night lows would fall to the upper 60s F–low 70s F in a warm and humid environment. Similar temperatures are expected in the Midwest at large, said Martell Crop Projections. This is largely seen as beneficial, for now, but sentiment could easily change given last year's problems. Jul 13 Soybeans closed at USD14.97 1/2, down 25 1/2 cents; Nov 13 Soybeans closed at USD12.85, down 25 3/4 cents; Jul 13 Soybean Meal closed at USD445.60, down USD8.00; Jul 13 Soybean Oil closed at 48.40, down 95 points.

Corn: The corn market also caved in to the general "risk off" move in commodities. Weekly export sales of 133,400 MT of old crop and 77,100 MT of new crop were at the low end of expectations for combined sales of 200-450 TMT. The Argentine Ag Ministry raised their corn production forecast from 25.7 MMT to 26.1 MMT, saying that harvesting is 80% complete. The Buenos Aires Grains Exchange estimated the Argentine corn crop at 24.8 MMT, unchanged from their previous estimate and versus 26.5 MMT from the USDA and 21.0 MMT in 2011/12. Heavy rain in France may cut the 2013 corn planted are and could also be harming yield potential some analysts are saying. The Ukraine weather centre estimated corn production there in 2013 at 23.0-24.2 MMT, depending on July rainfall. The Ukraine Ag Ministry are more bullish, estimating production this year at a record 27-28 MMT (versus 26 MMT from the USDA). Strategie Grains forecast EU-28 corn yields up 16% this year to 6.9 MT/ha and see production rising 15% to 66.0 MMT. Warm and wet seems to the theme for the week ahead for much of the Midwest. "Hot temperatures are predicted in the Midwest, but also recurring strong showers in the northwest part of the corn belt. A ridge of high pressure would build up in the Midwest today and tomorrow the beginning of a heat wave, but heavy rainfall is likely in Minnesota, Wisconsin, North Dakota, South Dakota and northern Iowa from recurring strong thunderstorms," said Martell Crop Projections. Jul 13 Corn closed at USD6.73 1/4, down 9 cents; Dec 13 Corn closed at USD5.60 1/2, down 10 cents.

Wheat: Wheat also succumbed to the general sell-off even though weekly export sales of 432,700 MT (plus a small 2014/15 sale of 2,000 MT) were decent enough. The trade was expecting sales of 300-650 TMT. In amongst the total was 90,800 MT sold to China, including 50,000 MT switched from unknown destinations. China was said to have bought French wheat yesterday. They are rumoured to also have been interested in US and Australian wheat this week. Japan bought 152,231 MT of milling wheat, split between US, Canadian and Australian origin. US Western white wheat was excluded on GMO grounds. Japan has bought 473,365 MT of wheat so far this month - the most in seven months. Taiwan bought 85,500 MT of US wheat for Jul/Aug shipment with a non GM guarantee. The Buenos Aires Grains Exchange said that the Argentine wheat crop is 42% planted versus 52.5% a year ago and stood by their planted area estimate of 3.9 million hectares. Strategie Grains estimated the EU all wheat crop 2 MMT higher than the USDA at 139.5 MMT. Russia’s federal statistics agency said that June 1st grain stocks were 11.0 MMT, down 34.3% from a year ago. The head of the Russian Grain Union estimated the 2013/14 wheat exportable surplus at 18-20 MMT and said that harvesting will start in earnest next week, around a fortnight earlier than usual. The tender line-up out of the Middle East and North Africa is quiet this week, although Egypt has hinted that it may be back in the market after a 4-month absence before the end of June. Jul 13 CBOT Wheat closed at USD7.00 1/2, down 6 1/2 cents; Jul 13 KCBT Wheat closed at USD7.37, down 2 3/4 cents; Jul 13 MGEX Wheat closed at USD8.14, up 1/2 cent.