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CME: Corn Futures Finished Higher Monday

10 January 2012

US - March Corn finished up 8 1/2 at 652, 11 off the high and 9 1/4 up from the low. May Corn closed up 8 3/4 at 659 1/2. This was 9 1/2 up from the low and 10 1/4 off the high.

March corn closed unchanged on the session today after choppy and two-sided trade and this leaves the market down 3 cents for the week. Traders look for significant rains for Argentina and southern Brazil for next week but overnight models were not as wet as yesterday and this helped to provide underlying support.

High temperatures ahead of the rain are expected to do additional yield damage. Weekly export sales came in at 299,500 metric tonnes for the current marketing year and 6,500 for the next marketing year for a total of 306,000 which was below trade expectations.

Cumulative corn sales stand at 60.7 per cent of the USDA forecast for 2011/2012 (current) marketing year versus a 5 year average of 52.3 per cent. Sales of 453,000 metric tonnes are needed each week to reach the USDA forecast.

Uncertainty for the longer-term forecast for South America on Sunday night helped keep trade choppy after the firm open. Traders expect corn production in the US to be revised lower by about 45 million bushels for the USDA production report next week due to a revision lower in yield or even harvested acreage.

Ending stocks are expected to be revised down by about 100 million bushels as compared with 848 million in the last supply/demand update. March Rice finished up 0.125 at 14.805, 0.095 off the high and 0.055 up from the low.

Wheat Futures Closed Higher

March Wheat finished up 17 at 641 3/4, 3 1/4 off the high and 16 3/4 up from the low. July Wheat closed up 16 1/2 at 676 3/4. This was 15 1/4 up from the low and 1 3/4 off the high. March wheat closed 4 1/2 cents lower on the session today and this left the market down 28 cents for the week.

The market saw an early bounce led by strength in the other grains. However, a jump in the US dollar and weak export news helped to spark a set-back and a move to lower on the day into the mid-session. Weekly export sales came in well below trade expectations at 138,600 metric tonnes for the current marketing year and 29,500 for the next marketing year for a total of 168,100.

As of December 29th, cumulative wheat sales stand at 77.9 per cent of the USDA forecast for 2011/2012 (current) marketing year versus a 5 year average of 74.6 per cent. Sales of 252,000 metric tonnes are needed each week to reach the USDA forecast. At their overnight tender, Egypt bought 240,000 tonnes of wheat with 60,000 from Ukraine, 60,000 from Russia or Kazakhstan and 120,000 tonnes of French wheat.

The lack of US wheat was seen as a negative force. Tunisia bought 50,000 tonnes of optional origin milling wheat. Traders expect total winter wheat planted acreage for 2012 to increase about 300,000 acres from last year (last year 40.646 million) led by a significant jump in herd red winter wheat and smaller acreage for soft red.

Ending stocks for the 2011/12 season are expected to be revised down by about 35 million bushels as compared with 878 million in the last supply/demand update. March Oats closed up 8 1/4 at 295 1/2. This was 6 1/2 up from the low and 1 off the high.

Soybean Futures Closed Higher

March Soybeans finished up 36 1/2 at 1233, 2 off the high and 38 1/2 up from the low. May Soybeans closed up 36 at 1242. This was 37 1/2 up from the low and 2 1/4 off the high. March Soymeal closed up 11.1 at 323.5.

This was 12.4 up from the low and 1.0 off the high. March Soybean Oil finished up 1.21 at 52.33, 0.02 off the high and 1.14 up from the low. March soybeans closed 12 1/2 cents lower on the session today and this leaves the market down 11 1/4 cents for the week. A slightly drier forecast for Argentina for next week and ideas that the weather forecast could shift drier again in the next few days along with very hot weather in the forecast for the weekend helped to spark some early support for the soybean market.

The jump in the US dollar and weak action for financial markets even with positive economic news helped to spark the sell-off into the mid-session. Weekly export sales for soybeans came in well below trade expectations at 281,300 metric tonnes. Cumulative soybean sales stand at 68.2 per cent of the USDA forecast for 2011/2012 (current) marketing year versus a 5 year average of 73.2 per cent.

Sales of 319,000 metric tonnes are needed each week to reach the USDA forecast. Meal sales were higher than expected at 144,400 metric tonnes as compared with sales of 97,000 metric tonnes needed each week to reach the USDA forecast. Oil sales came in at 7,300 metric tonnes. The break pushed the market down to new lows for the week. March soybeans closed at 1207 3/4 last week.

Talk of China buying US soybeans this week helped to provide underlying support along with weather uncertainties for the South America outlook for the second half of the month. Traders expect soybean production in the US to be revised higher by a few million bushels for the USDA production report next from 3.046 billion last month. Ending stocks are expected to be revised higher by just a few million bushels as compared with 230 million in the last supply/demand update.


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