Chicago Market Close - Friday

19/07/13 -- Soycomplex: The market continues to add back in much of the nearby premium that was taken away when the Jul 13 bean and meal contracts expired. Strong demand for meal sees old crop US export sales now running at 99.9% of the USDA forecast for the season following yesterday's weekly report, the 5-year average for this time of the year is 88.7%. The word on the streets is that Argentine meal is getting lower in protein, probably as a result of lack of crop rotation after farmers there continue to grow beans on beans on beans, year after year. Hence demand for meal is switching to the US. This is also keeping nearby demand for US beans buoyant. New crop soybean sales are also doing well, currently standing at 33.7% of the USDA forecast for the 2013/14 marketing year versus the 5-year average of 23.0%. US weather forecasts remained non threatening judging by today's latest weather models. The GFS and EU model both seem to agree on the chances of cooler and wetter next week, which will aid soybean development. The NOAA apparently now forecast generally crop-friendly weather for the US Midwest to last into the autumn. The latest Commitment of Traders Report shows managed money increasing their net long position by 12,244 contracts for the week through to Tuesday night, bringing their total net long position to 124,432 contracts. On the day Aug 13 Soybeans closed at USD14.90 3/4, up 21 1/2 cents; Nov 13 Soybeans closed at USD12.74, up 8 1/4 cents; Aug 13 Soybean Meal closed at USD482.40, up USD12.00; Aug 13 Soybean Oil closed at 45.50, down 2 points. For the week as a whole Aug 13 beans rose 61 3/4 cents with Nov 13 up 16 3/4 cents, Aug 13 meal up USD39.50 and Aug 13 oil down 72 points.

Corn: The central and western Corn Belt are in need of rain heading into the key corn pollination period across the next two weeks, and the current forecasts say that they are going to get it. "The HPC Medium Range forecast is very wet, due to the expectation an unstable front would stall out in the Midwest. Recurring showers and thunderstorms would bring at least one inch of rainfall, but locally 2 inches, over the next 5 days. The entire Midwest corn and soybean area would get meaningful rain. The 7-day HPC forecast is even wetter, predicting 1.5-2.5 inches of rain all together," say Martell Crop Projections. If the forecast rains do develop then that potentially pushes us one step closer to a record 13.7-14.0 billion bushel US corn crop in 2013, and with that comes the widely touted likelihood of new crop Dec 13 testing the recent 2 1/2 year closing low of USD4.91 1/4 set two weeks ago. The Argentine Ministry said that the corn harvest there is now almost over at 92% complete They surprised everybody by increasing their production forecast from 26.1 MMT to 32.1 MMT, far higher than the USDA's current 26.5 MMT estimate, and a record by some considerable distance. It remains to be seen if there may be political reasons in a forecast this high, is it to compensate for the country's lack of wheat? The Buenos Aires Grains Exchange only estimated Argentine corn production at 24.8 MMT. South Korea NOFI bought 165 TMT of corn from South Africa and the Black Sea region for Sep/Dec shipment. The Ukraine Economy Ministry said that their 2012/13 corn exports were 13.68 MMT and forecast that they will rise to 14.39 MMT in 2013/14. Ukraine's 2012/13 corn ending stocks were said to be 2.05 MMT, rising to 2.50 MMT by the end of 2013/14. On the day Sep 13 Corn closed at USD5.44, up 3 cents; Dec 13 Corn closed at USD5.00 3/4, unchanged. For the week that puts Sep 13 down 1 1/2 cents and Dec 13 down 8 1/2 cents.

Wheat: The wheat market closed mostly firmer, with news that China had bought two cargoes of US SRW wheat overnight supportive. They were also said to have booked 600 TMT of Australian wheat for Jan/Mar shipment. That, along with earlier recent purchases from the US, Australia, Canada and France already puts them well on the way towards importing the 8.5 MMT of wheat in 2013/14, the highest in 18 years, that the USDA have them pencilled in to buy this season. Other trade estimates are now 10 MMT or even more. The Argentine Ministry cut their estimate for the 2012/13 wheat crop there from 9.0 MMT to just 8.5 MMT, well below the USDA's 10.0 MMT, highlighting just how tight stocks there are. A report on Reuters earlier this week said that domestic Argentine wheat prices were around USD406/tonne versus USD219/tonne at the turn of the year and only USD175/tonne a year ago. The Buenos Aires Grains Exchange said 87.4% of Argentina’s 2013/14 wheat crop has been planted versus 84% a year ago at this time. They estimated Argentina’s 2013/14 wheat area at 3.9 million ha, unchanged from previously and 8.3% up on last year. South Korea's NOFI bought 60 TMT of feed wheat, probably of Black Sea origin, for Nov shipment. Ukraine's Economy Ministry said that the country had exported 7.18 MMT of wheat in 2012/13, and would ship around 8.0 MMT in 2013/14. They said old crop ending stocks were 2.54 MMT and would be around 3.0 MMT at the end of the current new season. Russia said it had harvested 27.0 MMT of grains so far, including 21.9 MMT of wheat with yields of the latter up 24% on last year. It is thought that yields could decline significantly once the harvest progresses into spring sown crops however. On the day Sep 13 CBOT Wheat closed at USD6.64 1/2, up 4 cents; Sep 13 KCBT Wheat closed at USD7.05, up 2 3/4 cents; Sep 13 MGEX Wheat closed at USD7.50 1/4, unchanged. For the week that puts CBOT wheat down 10 3/4 cents, with Kansas down 7 3/4 cents and Minneapolis down 46 cents.