Chicago Closing Comments - Tuesday
03/12/13 -- Soycomplex: Beans closed slightly lower on old crop, and at around the middle of the day's trading range, whilst prices for the 2014/15 harvest were steadier. Rumours that a Chinese buyer was looking to cancel at least six cargoes of US beans scheduled for Jan delivery were unsettling. The weak US dollar however was supportive. There are signs that South American soybean supplies are decreasing. Brazil’s Trade Minster said Brazil exported 647,900 MT of beans in Nov, down sharply from 1.5 MMT in October. Informa Economics forecast the 2013/14 Brazilian soybean crop at a record 88 MMT, up 1.3 MMT from previously. That's in line with the USDA, but below some other trade forecasts - Dr Cordonnier suggests 90 MMT for example. Informa put the Argentine soybean crop at a record 59.5 MMT - the highest estimate in the market that I am aware of. Stats Canada are due to release their December numbers tomorrow, with the trade expecting Canadian canola production to be forecast at a record 16.9 MMT versus 16.0 MMT previously. ABARES estimated the Australian canola crop at 3.4 MMT, down 15% versus last year's crop of 4.0 MMT. Jan 14 Soybeans closed at $13.19 3/4, down 1 1/2 cents; Mar 14 Soybeans closed at $13.04 1/2, down 1 1/2 cents; Dec 13 Soybean Meal closed at $446.10, down $0.90; Dec 13 Soybean Oil closed at 39.90, down 44 points.
Corn: The corn market closed around 5-6 cents higher despite concerns over Chinese rejections due to some recent US corn shipments there containing non-approved GMO varieties. This could lead to cancellations and/or reduced Chinese interest in purchasing US corn. Nevertheless very robust ethanol margins are likely to see domestic demand in the US remain strong. The huge discount that currently exists versus wheat is also seen as being supportive, whilst producer selling remains subdued at these levels. There are signs that Argentina's old crop corn supplies are running low, they only exported 339 TMT of corn in October, down 68% versus September and down a similar percentage versus October 2012. There's a fairly widespread belief that the government vastly overstated Argentina's 2012/13 corn crop. There's talk that persistent wet weather will see a greater proportion of this year's French corn crop get cut for silage, possibly reducing the corn for grain crop to around 14.5 MMT versus 15 MMT last year. Informa cut their forecast for the EU-28 corn crop by 1.1 MMT to 66.4 MMT. Brazil's crop was cut by 0.5 MMT to 70.6 MMT, with Argentina's unchanged at 25 MMT. Ukraine's harvest estimate was raised 1 MMT to 28.5 MMT. The trade will be looking for the Energy Dept to confirm strong demand from the ethanol sector tomorrow. Last week's report had US ethanol output at 927,000 barrels/day in the previous week. Dec 13 Corn closed at $4.22, up 5 1/2 cents; Mar 14 Corn closed at $4.31 1/4, up 6 3/4 cents.
Wheat: Wheat closed around 4-7 cents higher across the three exchanges. Egypt's GASC bought one cargo of Romanian wheat in its tender. US wheat wasn't offered, although that is likely to be down to the shipping period requested being not very friendly for shipment from US - Dec 20-31. US wheat is expected to be in the ballpark for shipment in the new year though, especially if the dollar keeps falling as many think it will. ABARES surprised the market a little by increasing their forecast for the Australian 2013/14 wheat crop from 24.5 MMT to 26.2 MMT. That compares with 22.5 MMT last year and the current 2013/14 USDA estimate of 25.5 MMT. A strong rebound in output in WA, up from 7.3 MMT last year to 9.6 MMT this time round, was behind much of the increase although prospects in SA and VIC have also improved since their last report, they said. Stats Canada will also release updated Canadian wheat production estimates tomorrow, with the all wheat crop expected to come in at around a record 33.8 MMT, up 24% on last year's 27.2 MMT. Russia's wheat harvest is 98% complete at 54.1 MMT, according to the Ag Ministry. They've also harvested 16.3 MMT of barley off 95.5% of the planned area. Winter grains planting in Russia seems to have more or less ground to a halt at 14.7 million hectares versus the intended 16.4 million. Ukraine's winter grains planting is said to be over at a little over 7.7 million hectares, around 500k less than originally forecast. Dec 13 CBOT Wheat closed at $6.53 3/4, up 4 cents; Dec 13 KCBT Wheat closed at $7.12, up 7 cents; Dec 13 MGEX Wheat closed at $6.86 3/4, up 5 1/2 cents.
