30-06-2012 18:45 PM | Market Reports, News

Chicago market report - 30th June 2012



Soybeans: Jul 12 Soybeans closed at USD15.12 3/4, up 46 3/4 cents; Nov 12 Soybeans closed at USD14.27 3/4, up 24 1/4 cents; Jul 12 Soybean Meal closed at USD436.00, up USD9.40; Jul 12 Soybean Oil closed at 52.21, up 129 points. For the week overall Jul 12 beans gained 70 1/4 cents, Nov 12 beans 52 1/4 cents, Jul 12 meal USD14 and Jul 12 oil 247 points. A bearish USDA report, with the US 2012 soybean acreage coming in 2.1 million up on March and 0.5 million above the average trade guess and Jun 1st stocks also above market forecasts, saw beans drop around 18 cents immediately after the market opened. This lasted just a few minutes before the market leapt back into positive territory trading the weather. Outside markets were also a positive influence, with crude oil jumping more than USD7/barrel for a near 11% gain on the day on optimism over Europe. The latter was also responsible for a weaker dollar today, which also helped the grains sector. For soybeans in particular recent price rises don't appear to have slowed up recent export activity, as they have for corn. Funds bought an estimated 7,000 soybean contracts on the day. All eyes now will be on their revised yield estimates next month. Informa Economics reduced their forecast to 42.7bpa, 1.2bpa lower than the existing USDA estimate.

Corn: Jul 12 Corn closed at USD6.72 1/2, up 20 1/2 cents; Dec 12 Corn closed at USD6.34 3/4, up 2 1/2 cents. For the week Jul 12 corn was 81 1/2 cents, or almost 14%, higher with Dec 12 up 80 3/4 cents. The USDA pegged the US spring corn planted area at 96.4 million acres, a new post-war record and half a million more than they said in March. Jun 1st stocks were a bit below the average trade guess at 3.148 billion bushels. As with soybeans the opening five minutes were volatile now that the CME Group have changed things around so that USDA reports like this one are issued during trading hours. Corn posted an 28 cent trading range in those first five minutes before also deciding to concentrate on the weather issues and buoyed by sharply higher outside markets and the weak dollar. Next week's action will be dictated by weekend weather events and the revised forecasts as we progress throughout the week. It seems certain though that yield potential has already been harmed, and could not possibly average the USDA's record 166bpa estimate even with good rains next week. The fact that this season's corn crop was planted in a very timely manner is working against it, with maturity well ahead of normal. Informa Economics reduced their yield estimate to 154.9bpa. Funds were said to have been net buyers of around 5,000 contracts on the day.

Wheat: Jul 12 CBOT Wheat closed at USD7.39, up 13 cents; Jul 12 KCBT Wheat closed at USD7.38 1/2, up 3 1/2 cents; Jul 12 MGEX Wheat closed at USD8.64, down 3 3/4 cents. On the week, Chicago wheat was 65 3/4 cents higher, with Kansas wheat up 52 1/2 cents and Minneapolis gaining 5 cents. The USDA report pegged spring wheat acres at just under 12 million versus the average trade guess of 12.6 million. The all wheat area came in 900,000 acres below expectations at 56 million, although that is still 1.6 million up on last year. Funds were said to have bought around 4,000 Chicago wheat contracts on the day. The commitment of traders report shows them flipping from 10,000 short to 25,600 long in the week through to Tuesday. They are estimated to have been net buyers of around 4,000 since then, placing their net long somewhere in the region of 30,000 contracts. South Korea bought 110 TMT of US feed wheat for Nov/Dec shipment. Indonesia bought 32 TMT of Indian wheat for July shipment in what is said to be the first bulk Indian wheat shipment to Asia in seven years. The Indian government literally has more wheat than it knows what to do with, domestic silos are full and the rest is stored out in the open with the monsoon season knocking on the door. The problem is that is has paid local farmers significantly more than world price to procure these stocks, so selling them off now will incur a hefty loss that will not go unnoticed by the political opposition.

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