Chicago Demise Continues
12/02/13 -- Soycomplex: Mar 13 Soybeans closed at USD14.20 3/4, down 10 3/4 cents; May 13 Soybeans closed at USD14.09 1/2, down 7 3/4 cents; Mar 13 Soybean Meal closed at USD410.30, down USD2.70; Mar 13 Soybean Oil closed at 51.10, down 14 points. Fund selling in beans was estimated at a net 5-6,000 contracts. The market is quiet with China closed for the week and Brazil and Argentina also on holiday for a couple of days. That seems to be allowing prices to drift lower, with beans closing in on the USD14/bu mark and meal approaching USD400/tonne. Argentine weather forecasts are hinting at decent rains and cooler temperatures a week from now. Even so, Michael Cordonnier cut his forecast for Argentine soybean production by 1 MMT to 50.0 MMT, and 3 MMT below the USDA. The Brazilian bean crop was estimated at 81.0 MMT, unchanged from previous estimate and 2.5 MMT less than the USDA. Yesterday's weekly export inspections of just over 30 million bushels was a disappointment versus trade expectations of 45-50 million, but US sales and shipments are so well advanced that they only need to average 10.4 million/week from here on in to hit the USDA's target for the season.
Corn: Mar 13 Corn closed at USD6.96 1/4, down 6 cents; May 13 Corn closed at USD6.95 1/2, down 6 cents. This was an eighth successive lower close for corn as prices slid back below USD7/bu for the first time in just over a month. Fund selling was estimated at 9,000 contracts on the day. Michael Cordonnier estimated the Brazilian corn crop at 70.0 MMT and the Argentine crop at 22.5 MMT. Both numbers are unchanged from last week and well below the USDA's 72.5 MMT and 27.0 MMT respectively. The trade will be looking to tomorrow's weekly ethanol production data to see if the recent slump in demand for corn continues from that sector. There are strong rumours of several of the plants currently taking downtime coming back into production soon as margins have increased. Yesterday's weekly export inspections of 14.463 million bushels beat trade expectations of 5-10 million but still fell short of the 19.5 million/week needed to hit USDA targets. Many suggest that last week's revised estimate for US exports this season will have to be lowered further in the months ahead. South Korea bought Indian feed wheat in preference to corn overnight.
Wheat: Mar 13 CBOT Wheat closed at USD7.32, down 9 1/2 cents; Mar 13 KCBT Wheat closed at USD7.78, down 10 3/4 cents; Mar 13 MGEX Wheat closed at USD8.16, down 10 cents. Fund selling in Chicago wheat was estimated at a net 4-5,000 contracts, further increasing the size of their short. We haven't seen front month price in Chicago this low since last June. Yesterday's weekly export inspections of 22.452 million bushels were below the 26.3 million/week needed to hit USDA targets. For all the talk of US wheat being amongst the cheapest around exports continue to lag. Thursday's weekly export sales report could be crucial, if none of the recently rumoured business shows up. The US weather outlook is also showing a turn for the better with snow across north central and northwestern portions of the Midwest as well as the far northern Plains this past weekend, and additional snow is expected there this week, according to MDA CropCast. However "precipitation is expected to remain limited in the central and southwestern Plains," they add. Kazakhstan forecast that they will sell around 1 MMT of grains, mostly wheat, to Russia this season. Exports in February and over the coming months are likely to be in the region of 200 TMT/month, according to the Kazakh Grain Lobby group.