Chicago Closing Comments - Friday Night

04/04/14 -- Soycomplex: Beans closed mostly higher at the end of a choppy session, although front month May 14 posted nominal losses of a cent and a half. The impending start of fund money rolling forward their longs begins on Monday, which will effectively see them selling May and replacing it with July, was credited with putting the front month under a bit of pressure. Talk persists of problems with Chinese demand, but there are few signs so far that this is affecting demand for US beans, it seems to be South America where the problem lies. The Buenos Aires Grains Exchange said that Argentine farmers had harvested 9.5% of their 2013/14 soybean crop versus 3.3% a week ago and 5.8% a year ago. They estimated production at 54.5 MMT, unchanged from their previous estimate and up 12.4% versus 48.5 MMT in 2012/13. They said that the sunflower harvest is 85.5% complete and forecast the crop at 2.3 MMT, unchanged from their previous estimate. Oil World estimated Argentina’s Jan/Feb soybean crush at 3.5 MMT versus 2.9 MMT a year ago. The USDA release their April WASDE report on Wednesday. The trade is expecting US 2013/14 ending stocks to tighten from 150 million bushels to around 140 million. They may well raise their forecast for US soybean (and meal) imports. CONAB the come out on Thursday with their monthly Brazilian crop production estimates. Last month they had the Brazilian soybean crop at a record 85.44 MMT, with exports at 45.3 MMT. The latest Commitment of Traders report sees fund money continuing to add to their overall net long in soybeans for the week through to Tuesday night. They're now sitting on a net long of in excess of 193k contracts. May 14 Soybeans closed at $14.73 3/4, down 1 1/2 cents; Jul 14 Soybeans closed at $14.55, up 3/4 cent; May 14 Soybean Meal closed at $479.10, down $1.00; May 14 Soybean Oil closed at 41.57, down 10 points. For the week, May 14 beans gained 37 1/4 cents, meal added $10.70 and oil gained 109 points.

Corn: The corn market closed higher on the day and higher for the week. Today's Commitment of Traders report shows managed money adding over 36k corn contracts to their net long position which now stands at over 275k lots. That potentially leaves the market in a precarious situation should they all decide to get out at the same time for whatever reason. Fund money is expected to begin rolling out of front month May 14 on Monday, which could put that under a bit of pressure relative to the deferred positions. The US weather is seen warming up in the Midwest by the middle/latter half of next week, with temperatures of 65F in Chicago by next Thursday, according to MDA CropCast. They were said to have forecast 2014 US corn yields at 168.4 bu/acre, up 6% (or 9.6 bu/acre) on last year. China said that it is still evaluating MIR 162 GMO corn, and a report on Reuters suggested that approval for it may not now come until the second half of the year. That would continue to lean bearish for US corn export hopes there. Currently the US has 45.68 million bushels of unfulfilled sales to China (and a further 194.84 million sold to unknown). The Buenos Aires Grains Exchange's weekly Argentine crop progress report said that the corn harvest there is 13% complete versus 10% a week ago and 24% a year ago. They estimated production at 24.0 MMT, unchanged from their previous estimate but down versus the 2012/13 crop of 27.0 MMT. For next Wednesday's USDA WASDE report a Reuters poll has the average trade guess on 2013/14 US ending stocks at 1.403 billion bushels, down from 1.456 last month. CONAB update us on Brazilian crop production on Thursday, last month they estimated the corn crop there at 75.18 MMT, which is much higher than the USDA's current 70 MMT forecast. Before that, the USDA will release their first US crop progress report of the season on Monday. May 14 Corn closed at $5.01 3/4, up 1 3/4 cents; Jul 14 Corn closed at $5.07 1/2, up 2 1/4 cents.

Wheat: The wheat market closed lower on the day, and lower on the week. The fall came despite the latest Commitment of Traders report showing fund money adding around 8.5k lots of Chicago wheat to their new net long. They're said to now have their largest spec long holding in CBOT wheat since November 2012. The USDA are due to issue their first weekly crop condition ratings for US winter wheat since last October on Monday, with hefty falls in most of the major producing states expected (although the crop did enter winter dormancy with some of the highest good/excellent ratings in recent years). Wheat crops in Europe are well advanced, which may not necessarily be a good thing. FranceAgriMer reported that 90% of the French winter wheat crop is now displaying an ear of at least 1 cm versus only 18% this time a year ago. Moisture needs are therefore rising, and Meteo France say that French March rainfall was 35% below normal (whilst average temperatures were 1.1 C higher than normal). The 14 day forecast remains dry, although temperatures are expected to moderate. German wheat is said to be up to 4 weeks ahead of normal. They at least are expected to get better than average rainfall across the next two weeks, after a pretty dry winter. Polish wheat is said to be around 2 weeks ahead of normal development. The US weather forecast leans a bit more beneficial to winter wheat than it has, although it's hardly a soaking that they are in for. "Best rains are predicted in western Kansas and north-central Oklahoma with 0.30” - 0.75” inch of moisture. Other hard red wheat farms would received lighter rain, traces to .25 inch. If the forecast verifies, it would be the wettest week since February 8," said Martell Crop Projections.  The Philippines are tendering to purchase up to 134,500 MT of feed wheat of optional origin.  May 14 CBOT Wheat closed at $6.69 3/4, down 6 1/4 cents; May 14 KCBT Wheat closed at $7.33 3/4, down 10 1/4 cents; May 14 MGEX Wheat closed at $7.21 1/2, down 9 cents. For the week, that puts CBOT wheat down 25 3/4 cents, with KCBT losing 29 3/4 cents and MGEX 18 1/4 cents.