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CME: Corn Finished Lower Thursday

06 January 2012

US - March Corn finished down 15 at 643 1/2, 16 1/4 off the high and 4 up from the low. May Corn closed down 15 1/4 at 651 1/2. This was 3 3/4 up from the low and 16 1/2 off the high.

March corn closed sharply lower on the session with fund traders noted as aggressive sellers. The outlook for a more active rain event for Tuesday/Wednesday of next week was seen as the main reason for the weakness.

A turn down in outside market forces and a surge higher in the US dollar to the highest level since December 14th helped to spark long liquidation selling and a sharp break into the mid-session.

Talk of the overbought condition of the market added to the negative tone as speculators moved to the sidelines ahead of the weekend for fear that the weather forecast improves again on the weekend. Officials from the key producing state of Parana in Brazil pegged the corn crop this year at 6.4 million tonnes which is down from a December forecast of 7.4 million tonnes due to dry weather. Ethanol production for the week ending December 30th averaged 963,000 barrels per day.

This is up 0.1 per cent vs. last week and up 6.53 per cent vs. last year. Total Ethanol production for the week came in at a record high 6.741 million barrels. Corn used in last week's production is estimated at 102.58 million bushels. Corn use needs to average 95.3 million bushels per week to meet this crop year's USDA estimate. Stocks were 17.94 million barrels. This is up 1.53 per cent vs. last week and up 6.45 per cent vs. last year.

The hot and dry forecast in Argentina through Tuesday of next week continues to help provide some underlying support. Traders see weekly export sales, for release ahead of the opening Friday, near 500,000 tonnes. March Rice finished down 0.115 at 14.535, 0.165 off the high and equal to the low.

Wheat Futures Closed Lower

March Wheat finished down 20 3/4 at 629 1/4, 21 off the high and 2 3/4 up from the low. July Wheat closed down 19 1/4 at 664 3/4. This was 2 3/4 up from the low and 19 1/4 off the high. March wheat closed sharply lower on the session following the other grains lower as more and more talk of improving grain weather in Argentina next week has sparked more aggressive selling.

March KC wheat closed down 28 cents on the day and is already down as much as 47 3/4 cents from Tuesday's highs. The market was pressured by a strong US dollar again today with a surge up to the highest level since December 14th.

A recovery in the gold market and a firm tone for US equity markets helped to offset some of the dollar strength. Weakness in the other grains helped to drive the market sharply lower on the day and down to the lowest level since December 23rd.

Talk of the overbought condition of the market after the recent surge and further talk that winter wheat conditions have improved over the past month helped to pressure as well. Traders see weekly export sales, for release ahead of the opening Friday, near 225,000 tonnes. Egypt is tendering for optional origin wheat overnight. March Oats closed down 3 at 290. This was 2 up from the low and 8 off the high.

Soy Futures Closed Lower

March Soybeans finished down 21 at 1209, 24 3/4 off the high and 2 1/4 up from the low. May Soybeans closed down 20 3/4 at 1218 3/4. This was 2 1/4 up from the low and 23 3/4 off the high. March Soymeal closed down 7.4 at 313.2. This was 0.2 up from the low and 7.6 off the high.

March Soybean Oil finished down 0.97 at 52.06, 1.07 off the high and 0.03 up from the low. March soybeans closed sharply lower on the session and pushed back down into last week's range.

The enhanced forecast for rain for next week in Argentina plus a surge higher in the US dollar sparked a selling trend early today and the market was down more than 20 cents on the day into the mid-session. New weather models showing near 100 per cent coverage of measurable rain in Argentina next week and fears that the forecast could turn even more bearish over the weekend helped to spark a long liquidation selling trend to drive the market sharply lower on the day.

Officials from the key producing state of Parana in Brazil pegged the soybean crop this year at 12.73 million tonnes which is down from a December forecast of 14.12 million tonnes due to dry weather. Traders see weekly export sales, for release ahead of the opening Friday, near 400,000 tonnes.


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