Chicago Closing Comments - Friday

27/12/13 -- Soycomplex: Beans closed around 7 to 12 cents higher on the day, helped by weekly export sales coming in above trade expectations of 500-700 TMT at 788,300 MT (including 68,100 MT for 2014/15). That takes the total sold for delivery in 2013/14 to 39.7 MMT against the USDA's target for the entire season of 40.1 MMT - a 99% commitment. Outstanding sales unshipped are 17.8 MMT. Whether, and by how much, we see any of these unshipped bean sales get cancelled in the New Year remains to be seen. South American weather is the other key issue that the trade is currently debating. The forecast is for hot and dry conditions in Argentina and Southern Brazil to continue for the next couple days. However, more favourable weather is in forecast for next week – with cooler temperatures and some decent rains. Argentina is of particular concern as soybeans there were planting into wet ground. "Shallow rooted crops, planted late, would have been subject to severe moisture stress," under the recent conditions. "Cordoba and Santa Fe, key grain provinces just to the north of Buenos Aires were still hot and humid with highs over 100 F yesterday," noted Martell Crop Projections. However, "if the wet forecast verifies, it would go a long way toward repairing damage from recent dryness," they said. Jan 14 Soybeans closed at $13.31 1/2, up 12 3/4 cents; Mar 14 Soybeans closed at $13.13 3/4, up 8 1/2 cents; Jan 14 Soybean Meal closed at $445.70, up $4.70; Jan 14 Soybean Oil closed at 39.02, up 15 points.

Corn: The corn market closed around a cent or so higher in quiet holiday trade - front month Mar 14 corn had a trading range of less than 3 cents on the day. Weekly export sales of almost 2 MMT - made up of 1.48 MMT for 2013/14 and 509,200 MT for 2014/15 were far higher than the expected 550-750 TMT. However, confirmation of China rejecting both US corn and DDGS shipments adds a bearish influence to the market. Few expect the suspect MIR 162 variety in question to get Chinese approval until after their Lunar New Year celebrations than end in February, and some speculate that the situation could go on a lot longer than that. South Korea cancelled a tender to buy 70 TMT of optional corn, possibly preferring to wait and see if it can pick up a cheap "distressed" cargo that's been rejected in China. The Energy Dept said that weekly US ethanol production was down 2,000 barrels/day on last week to 926,000 bpd. The Ukraine Ministry said that the corn harvest there is just about over at 30.25 MMT in bunker weight - easily a record volume. Russia said that it had just finished a corn harvest of 10.68 MMT in clean weight, up 30.1% compared with 2012 and also a record. The Buenos Aires Grain Exchange said that corn planting in Argentina is 73.4% complete, and left their area estimate unchanged from last week at 3.3 million hectares - down from close to 3.7 million last year. Mar 14 Corn closed at $4.27 1/2, up 1 1/4 cents; May 14 Corn closed at $4.35 3/4, up 1 1/4 cents.

Wheat: The wheat market finished mixed, between 3 cents higher and 3 cents lower. Weekly export sales beat trade estimates of 350-550 TMT coming in at 596,900 MT for 2013/14 and 60,000 MT for 2014/15. Recent stalwart Brazil was the top buyer, taking 140 TMT, whilst China also booked 55 TMT. Despite US wheat being offered at substantial discounts to EU wheat, funds seem to be willing to keep pressing the pedal lower. Monday's Commitment of Traders report is expected to show them sitting on a record short position in Chicago wheat. It's proven to be a profitable strategy thus far, with CBOT wheat falling to a low of $6.01/bushel on the Mar 14 contract yesterday - the lowest for a front month since May 2012. Of course that always leaves the door open for a sharp short-covering rally if they get spooked. The Buenos Aires Grain Exchange said that the Argentine wheat harvest is 74.3% complete, producing a crop of just under 6.7 MMT to date. In the Southwest of Buenos Aires and La Pampa South the harvest has generally delivered yields below those expected, they said. However conditions Southeast of Buenos Aires (where harvesting is only 27% done) are said to have been much better throughout the crop year, and yields here are coming in much higher. Hence, they still stand by their forecast for a wheat crop of 10.35 MMT this year. Mar 14 CBOT Wheat closed at $6.09, up 3 cents; Mar 14 KCBT Wheat closed at $6.44 1/4, down 1/4 cent; Mar 14 MGEX Wheat closed at $6.34 3/4, down 3 1/2 cents.