Chicago Ends Week On A High Note - Even Wheat!

20/12/13 -- Soycomplex: Beans closed higher as a warm and dry forecast for Argentina prompted further fund buying despite the looming weekend and Christmas holiday period. The latest Commitment of Traders report shows funds increasing their net soybean long by almost 9,500 contracts for the week through to Tuesday, taking their net long position to in excess of 172k lots. Funds were said to have been further net buyers of around 4,000 soybean contracts on the day. The weather forecast for Argentina is hot and dry for at least the week ahead. The Buenos Aires Grains Exchange pegged Argentina soybean planting at 77% complete as of Dec. 19, up from 66% a week previously. The Argentine Ministry estimate final plantings up 4% at 20.8 million hectares. Conditions in Brazil are generally favourable. Jan 14 Soybeans closed at $13.38, up 11 cents; Mar 14 Soybeans closed at $13.30 1/4, up 11 1/4 cents; Jan 14 Soybean Meal closed at $446.10, up $4.00; Jan 14 Soybean Oil closed at 39.43, up 10 points. For the week that puts Jan 14 beans 10 1/2 cents higher, with Jan 14 meal up $14.00 and Jan 14 oil down 39 points.

Corn: The corn market closed around 3 cents firmer to end the week on ideas that heat and dryness in Argentina might lead to some production losses. The Buenos Aires Grains Exchange say that corn plantings in Argentina are 65% complete as of Dec. 19, up from 55% a week ago. The crop therefore isn't at the important pollination stage yet, which would hurt production potential if the heat wave continued until then. The Argentine Ministry see plantings down 6.5% to 5.7 million hectares this year. Reuters reported that China has rejected 545 TMT of US corn in the past month or so, in line with estimates from earlier in the week of 500-600 TMT. Ukraine said that it's corn harvest was all but done, and has topped the 30 MMT mark (easily a record volume). Russia said that it exported a record 589 TMT of corn in November, with South Korea (247 TMT) and Turkey (179 TMT) the main homes. The former is traditionally a big buyer of US corn. The USDA announced the sale of 180 TMT of US corn to Japan for 2014/15 under the daily reporting system. The Commitment of Traders report shows funds sitting on a net short in corn of almost 105k lots as of Tuesday night, an extension of the recent rally is possible if they continue to cover in this short ahead of the year-end. Mar 14 Corn closed at $4.34, up 3 1/2 cents; May 14 Corn closed at $4.42 1/4, up 3 3/4 cents. For the week Mar 14 corn was 13 1/2 cents higher.

Wheat: Wheat managed to post rare gains in what might be considered pre-weekend profit-taking and a bit of light consolidation. Whilst the warm and dry pattern in Argentina may be of cause for concern for soybeans and corn, for wheat the crop is too advanced for it to make any difference to yields. Indeed, the dry and sunny conditions are helping to move the Argentine harvest on at a pace. Things are now seen 54% complete, producing a crop of 4.456 MMT to date. The Buenos Aires Grains Exchange again stood by their estimate for a wheat crop of 10.35 MMT. The Argentine Ministry have raised their forecast this week, but only to 9.0 MMT. The BAGE say that early yields in some of the more productive areas in SE Buenos Aires Province are proving to be "very good" - hence their optimism that final production will come in better than the current bare figures of less than 4.5 MMT off more than half the planted area would suggest. Fund money continues to build a short position in CBOT wheat, with the latest Commitment of Traders report showing them adding around 2,500 lots for the week through to Tuesday, to have them sitting on a net short of almost 72k contracts. Mar 14 CBOT Wheat closed at $6.13 1/2, up 2 3/4 cents; Mar 14 KCBT Wheat closed at $6.56 3/4, up 4 cents; Mar 14 MGEX Wheat closed at $6.51, up 4 3/4 cents. For the week CBOT wheat was down 4 3/4 cents, with KCBT down a quarter and MGEX up 8 3/4 cents.