Talk the market down and hit the sell side of CBOT with printed money funded shorts ...
-------------------------------------------------------- US hikes hopes for world wheat crop to record high 9th December 2011, by Agrimoney.com
Grain prices weakened in Chicago after a key report eased fears over the squeeze in world crop supplies, upgrading the world wheat harvest to a record high. Wheat for March fell 2% to the lowest for a nearest-but-one contract since July 2010, while corn dropped 2.5% back below $6 a bushel, while soybeans dropped to a 14-month low of $11.00 ¼ a bushel.
Crop prices at 17:00 GMT
Paris wheat: E174.00 a tonne, -0.7%
Chicago wheat: $5.90 a bushel, -1.2%
Chicago corn: $5.88 ¾ a bushel, -1.9%
Chicago soybeans: $11.06 ¼ a bushel, -2.3%
Prices for March grains contracts and January soybeans
The tumbles followed a lift by the USDA to global, and domestic, supplies of all three crops.
The USDA also lowered its estimates for the corn and soybean takings that US farmers will receive in 2011-12, citing, for the oilseed, reduced export prospects in the face of higher supplies in competitor nations.
The report was broadly seen as boding ill for prices, with Societe Generale viewing it as "bearish corn, bearish soybeans, bearish wheat".
Broker Benson Quinn Commodities said: "Trade had been leaning bearish this report due to slow pace of global export trade and increased competition due to larger global production. But we see this report as more bearish than numbers being traded ahead of report."
'Record yields'
The most marked country revision was in the estimate for China's corn harvest, upgraded by 7.25m tonnes to 191.8m tonnes, close to Beijing figures released earlier this month.
Wasde US stocks estimates, change on last and (on market forecast)
"Weather was generally favourable for this year's crop. Record yields were reported despite summer conditions in the northeast growing areas that were somewhat warmer and drier than in 2008-09," Michael Scuse, acting US secretary of agriculture, said. This lift, plus better hopes for the European Union harvest, were between them responsible for an 8.5m-tonne increase to a record 867.5m tonnes in the estimate for the world corn harvest in 2011-12, coming within an ace of matching demand. The USDA had in last month's Wasde report on world crop supply and demand forecast a deficit of 7.5m tonnes. Harvest upgrades
However, wheat witnessed the most sweeping changes, with the USDA factoring in tonne-for-tonne upgrades this week by Australian and Canadian officials to their estimates for domestic harvests, and plugging in a less-well-flagged raise hopes for the newly-started Argentine harvest too.
Wasde world stocks estimates, and change on previous estimate
Wheat: 127.19m tonnes, +5.62m tonnes
Soybeans: 64.54m tonnes, +980,000 tonnes
Wheat: 208.52m tonnes, +5.92m tonnes
Data for 2011-12 carry-out stocks
"Argentina production is raised 1.5m tonnes with higher expected harvested area and yields, with recent improvements in late-season growing conditions," Mr Scuse said. The revision left the Argentine harvest pegged at 14.5m tonnes, well above many in-country forecasts. Julian Dominguez, Argentina's farm minister, last week estimated the crop at 13.5m tonnes, while the Buenos Aires grains exchange has it at 13.0m tonnes, and the Rosario grains exchange on Wednesday put it at 12.8m tonnes. However, many traders have puzzled over the extent of Argentina's competitiveness on world wheat markets, which gained it orders from Egypt and Saudi Arabia this week, with one London analyst musing that it was down to a wish to gain hard currency. Bumper supplies
The USDA lifted its estimate for the world wheat harvest by 5.7m tonnes to 689.0m tonnes, beating the 2009-10 record. And, with ideas for Argentine and Australian stocks coming into 2011-12 also raised, the estimate for end of season stocks were lifted by 5.9m tonnes to a 12-year high of 208.5m tonnes, despite improved ideas for wheat use by livestock farmers which tally with a rash of other comments this week. For soybeans, the estimate for world stocks was raised by 980,000 tonnes to 64.5m tonnes, reflecting reduced forecasts for Chinese and European Union consumption.
'Structural weakness'
Among commentators, US Commodities termed the report "negative" adding that, with output hopes increased, it "highlights the structural weakness of the market".
"The last 18 months support has been from production shortfalls. World production is now on the increase," the broker said. At Societe Generale, Michael Haigh acknowledged that the revisions had created "downside risks" to forecasts of soybean prices, returning above $12 a bushel and, in essence, staying there throughout next year. However, he remained upbeat on prospects for corn prices next year, terming the change in US corn stocks highlighted by the report "negligible, leaving ending stocks at historically tight levels".
