Chicago Grains Closing Comments

20/01/15 -- Soycomplex: Beans closed around 8-10 cents lower, helped on their way by news of another 174 TMT worth of Chinese cancellations. News that China posted the slowest economic growth in 24 years in 2014 didn't help either. China are of course the world's largest soybean buyer by some considerable distance, importing almost 6 times the volume that second placed Europe does, and accounting for almost two thirds of all international trade in beans. Chinese cancellations of US beans for the 2014/15 season are now almost 500,000 MT. "The combination of competitive South American offers, ample supplies, tight crush margins and some issues with financing can be given credited for the recent cancellations," said Benson Quinn's Brian Henry. He said that he could see China maybe cancelling a further 1 MMT of US purchases. Weekly US export inspections are still holding up though at 1.518 MMT this week, although some think that this could be the last week that we see this sort of volume as demand starts to switch to South America. The Rosario Grain Exchange lowered their forecast for the Argentine soybean crop by 0.5 MMT to 54.5 MMT, on the back of a lower planted area. Most of the crop is in good to very good condition however, they say. Mar 15 Soybeans closed at $9.82, down 9 3/4 cents; May 15 Soybeans closed at $9.87 3/4, down 9 3/4 cents; Mar 15 Soybean Meal closed at $326.50, up $0.30; Mar 15 Soybean Oil closed at 32.84, down 55 points.

Corn: The corn market closed around 3 cents higher, helped by weekly export inspections of close to 750 TMT, which was towards the top end of trade anticipations. "Late in the session corn seemed to shrug off the bulk of the bearish news in the market concerning oilseeds, currencies, and crude," said Benson Quinn. US corn exports are now running at around 30% of the USDA target for the season, versus 35% typically at this time. Opportunities to ship US corn to China remain limited, although they are buying large volumes of US sorghum. Weekly sorghum export inspections were 9.2 million bushels, of which 8.5 million was for China. Last week's sorghum export inspections were only 4.8 million, and the five year average for this time is just 1.9 million. Sorghum exports are already 50% of the USDA target for the season versus just 21% a year ago and 38% for the 5-year average. Mar 15 Corn closed at $3.90 1/4, up 3 1/4 cents; May 15 Corn closed at $3.97 3/4, up 3 1/2 cents.

Wheat: The wheat market closed a little firmer. Weekly export inspections were a little over 310 TMT, up 30% versus last week, although still far from impressive. US wheat continues to struggle to match more competitive offers from the likes of Europe, particularly into the North African/Middle East market. "Washington the 3rd largest US winter wheat state has received beneficial heavy rainfall recently. Waves of showers the past 2 weeks brought 1.6 inches of rainfall, 45% above normal. The wet weather pattern started in mid December. The wet weather pattern in the Pacific Northwest may reflect the weakening El NiƱo signal," said Martell Crop Projections. The market currently seems relatively relaxed about the situation in Russia and Ukraine, despite the fact that production problems there have sent the market soaring in two out of the last five years. Russia only managed to buy less than 7,000 MT of wheat at today's intervention purchase round, with total net purchases since Sept 30 at only 320 TMT. Mar 15 CBOT Wheat closed at $5.37, up 4 1/4 cents; Mar 15 KCBT Wheat closed at $5.77 3/4, up 3/4 cent; Mar 15 MGEX Wheat closed at $5.89 1/2, up 5 cents.