CME: Corn Futures Closed Lower Tuesday
22 February 2012
US - May Corn finished down 11 3/4 at 633 1/2, 14 1/2 off the high and 4 3/4 up from the low. July Corn closed down 10 3/4 at 637 1/2. This was 4 3/4 up from the low and 13 1/2 off the high.
May corn saw a bounce of near 5 cents late in the session but still closed sharply lower on the session. Despite a clearly bullish tone to gold, crude oil and the weak action for the US dollar, funds were active sellers in corn and wheat as the outlook for a record corn crop with normal weather and concerns that the US ending stocks outlook will at least double for the 2012/13 season compared with this season helped to pressure.
Traders have been talking about the USDA outlook conference for the past two weeks so this was not "new news" so the aggressive selling pace from the funds was tough to explain. The market gave back nearly all of the gains from Thursday and Friday last week and futures challenged last weeks lows.
Reports of decent rainfall over Argentine growing areas over the weekend put the corn market on the defensive this morning, and more than offset what was seen as a positive tilt to outside market forces. Final approval of a Greece debt bailout package has provided little carryover support for corn this morning as the result was widely anticipated by the market.
Private exporters reported a sale of 110,744 tonnes of US corn to unknown destination for the 2011/12 time frame. Weekly export inspections came in at 34.7 million bushels which was near the high end of trade expectations.
Exports need to average 30.9 million bushels per week to reach the USDA projection for the year. March Rice finished down 0.315 at 14.07, 0.38 off the high and 0.01 up from the low.
Wheat Futures Closed Lower
May Wheat finished down 11 at 636 3/4, 15 1/2 off the high and 8 3/4 up from the low. July Wheat closed down 8 1/4 at 651 1/2. This was 11 1/2 up from the low and 13 1/2 off the high.
May wheat closed sharply lower on the session but managed to bounce off of the mid-session lows. Even with a sharp break in the US dollar and a surge in gold, crude oil and other commodity markets, wheat futures followed the corn market sharply lower on the day after trading higher on the day in the overnight trading session.
News of rain over several key US growing areas kept pressure on the wheat market early today, and has more that offset support from positive outside market forces this morning. Cold weather in Europe may have provided some limited support for wheat but was unable to change the overall negative tone for the market.
Weekly export inspections came in at 22.15 million bushels which was above trade expectations. Exports need to average 15.9 million bushels per week to reach the USDA projection for the year.
Algeria is tendering to buy 125,000 tonnes of optional origin milling wheat. July wheat rallied 11 1/2 cents off of the mid-session lows but still managed to close moderately lower on the day. The mid-session lows were the lowest since January 20th. March Oats closed down 3 at 317 1/4. This was 1 up from the low and 6 3/4 off the high.
Soybean Futures Closed Higher
May Soybeans finished up 3 1/4 at 1277, 5 1/4 off the high and 10 1/2 up from the low. July Soybeans closed up 3 at 1285. This was 10 1/2 up from the low and 5 3/4 off the high. May Soymeal closed down 2.4 at 332.7.
This was 1.3 up from the low and 4.8 off the high. May Soybean Oil finished up 0.65 at 54.45, 0.2 off the high and 0.73 up from the low. May soybeans saw choppy and volatile trade today but managed to close higher on the session and the rally pushed the market to the highest level since October 17th.
Fund traders bought soybeans and sold corn and wheat ahead of the USDA outlook conference which is the first estimate for ending stocks for the coming season. Traders see rising soybean demand and declining planted area and a strong possibility that the USDA will see lower ending stocks for the 2012/13 season than this year and this helped to support the spreading.
The market felt early pressure as reports of South American precipitation weakened prices after the opening. A sell-off in the Dollar and rising US equity markets provided carryover support near the lows and helped the market recover from early losses.
Ideas of lower South America oilseed production plus losses to the rapeseed crop eastern Europe and China this winter helped to support the soybean oil market with December oil moving to the highest level since September 21st. Private exporters reported a sale of 250,000 tonnes of soybeans to China for the 2012/13 time frame.
A report that a major European-based trade publication may cut their estimate for 2012 Brazilian soybean production was also thought to be a key positive factor for prices during the early portion of the session. Weekly export inspections came in at 38.4 million bushels which was near the high end of trade expectations. Exports need to average 15.6 million bushels per week to reach the USDA projection for the year.
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