Chicago Grains Closing Comments

16/12/14 -- Soycomplex: Beans closed lower on concerns about the Chinese economy and with a weaker Brazilian real heading bearish influences. The latter triggered a bout of Brazilian producer that selling that Benson Quinn said was the heaviest seen since last March. AgRural said Brazil bean planting is 96% complete versus 98% on average. Another bad day at the office for crude oil added to the bearish tone. Fund money was said to have ditched around a net 6,000 soybean contracts on the day. It is estimated that Chinese soybean imports will peak at around 7.5 MMT this month, before falling to around 7 MMT in January and 5 MMT in February (Chinese New Year). This is a normal seasonal trend. Oil World estimated the global 2014/15 soybean crop at 312.9 MMT versus a previous estimate of 309.1 MMT and compared to the 2013/14 production of 285.0 MMT. Their new figure is almost identical to the USDA's 312.8 MMT. Jan 15 Soybeans closed at $10.23 1/2, down 16 cents; Mar 15 Soybeans closed at $10.31 1/4, down 14 3/4 cents; Jan 15 Soybean Meal closed at $356.60, down $8.80; Jan 15 Soybean Oil closed at 31.77, down 50 points.

Corn: The corn market closed around 2 cents lower. There continues to be talk of China finally approving MIR 162 corn and DDGS with traces of it for import, but no official confirmation of this has yet been forthcoming. The spectre of crude oil now falling to levels not seen since the dark times of the 2009 aftermath to the sub-prime led financial crisis are hard to ignore, although corn is doing its best to do just that. Ethanol values have held up very well, up until now, but are finally starting to show signs of cracking. Or should that be fracking? South Korea's MFG is shopping for 280,000 MT of optional origin corn for April shipment. South America might be the most likely winner of that business. "While US corn offers have gotten more competitive, I wouldn’t give the US the competitive edge into many potential destinations," said Benson Quinn's Brian Henry. Coceral increased their estimate for the EU-28 corn crop from the previous 72.8 MMT to a new record 73.5 MMT, which is more than 10 MMT up on a year ago. They peg the French crop at a record 16.91 MMT, although some other estimates are in the 17-18 MMT region. Mar 15 Corn closed at $4.06, down 2 1/2 cents; May 15 Corn closed at $4.14 1/2, down 2 cents.

Wheat: The wheat market closed higher across all three exchanges. Russia raised their interest rates from 10.5% to a hefty 17% overnight in an effort to stabilise the rouble which had earlier fallen to new all time lows against the dollar and euro. Gossip abounds concerning some form of covert export restrictions being introduced. There's talk that the Russian Veterinary and Phytosanitary Surveillance Service is now saying it will only release phytosanitary certificates to buyers from Turkey, Egypt, Armenia and India. Other reports suggest that some loaded vessels are sat portside waiting for clearance, which currently isn't forthcoming. Russia has announced a hike in the intervention price it will pay to farmers, as was expected. Following the recent demise of the rouble however the prices on the table are still below what is available on the cash market. The most likely beneficiary of Russia standing away from the export market is likely to be Europe before the US however. Coceral raised their forecast for the EU-28 soft wheat crop to 148.5 MMT, which is 12 MMT above last year's level. They see France at 37.45 MMT versus 36.87 MMT a year ago, with Germany at 27.81 MMT versus 24.87 MMT and the UK at 16.52 MMT versus 11.92 MMT. Mar 15 CBOT Wheat closed at $6.23 1/4, up 4 1/4 cents; Mar 15 KCBT Wheat closed at $6.54 3/4, up 7 3/4 cents; Mar 15 MGEX Wheat closed at $6.34 1/4, up 1 3/4 cents.