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CME: Corn Futures Closed Higher Tuesday

04 April 2012

US - May Corn finished up 3 1/4 at 658 1/4, 7 3/4 off the high and 6 1/4 up from the low. July Corn closed up 2 at 653. This was 5 1/4 up from the low and 6 3/4 off the high.

The release of the Fed Reserves minutes from the policy meeting in March sparked aggressive long liquidation selling late in the session to give back a most of the early gains.

Funds were noted buyers on the day but sellers late as the US dollar surged and gold and equity markets were hit hard. Talk of tight holding from producers and limited supply going into the late spring helped to support the market in spite of a weaker tone Tuesday for outside market forces.

The tight cash situation with stronger basis levels noted helped to support nearby corn relative to other grain markets and supported a strong rally in May corn and bull spreads worked well.

The Argentina Rosario grains exchange pegged the 2011/12 corn crop at 19.7 million tonnes, down slightly from their previous estimate and down from the March USDA estimate of 22 million tonnes. May Rice finished up 0.045 at 14.93, 0.07 off the high and 0.005 up from the low.

Wheat Futures Closed Higher

May Wheat finished up 1 at 658, 1 off the high and 8 1/2 up from the low. July Wheat closed down 1/2 at 669. This was 10 up from the low and 1 off the high.

May wheat managed to close slightly higher on the session after spending much of the day in negative territory. Key financial and metal markets reacted to the Fed Reserve minutes release and funds turned sellers in the other grains but wheat saw aggressive short-covering late in the day.

Rain in the plains overnight and ideas that the crop may continue to improve helped to spark the early selling pressures. However, buying emerged near yesterday's lows to provide some support and the market managed to trade back up to just slightly lower on the day.

Traders see some rain in the forecast for Europe and the fast start to the spring wheat plantings as negative forces as well. The first weekly Winter Wheat Conditions report of the year showed that 58 per cent of the crop is rated good/excellent compared to 37 per cent last year. The 10 year average for this time of year is 48 per cent. The highest percent rated good/excellent was 71 per cent in 2007.

The spring crop is already 8 per cent planted as compared to 1 per cent last year. The 10 year average for this time of year is 2 per cent. The previous high was 3 per cent in 2007. Outside market forces added to the negative tone early in the session. Ethiopia bought 35,000 tonnes of wheat from Russia. May Oats closed up 1 1/4 at 336. This was 4 up from the low and 3 off the high.

Soybean Futures Closed Lower

May Soybeans finished down 4 1/4 at 1416 3/4, 17 1/2 off the high and 2 3/4 up from the low. July Soybeans closed down 6 at 1421 1/4. This was 1 1/4 up from the low and 17 3/4 off the high. May Soymeal closed down 4.5 at 386.7.

This was 0.2 up from the low and 8.1 off the high. May Soybean Oil finished down 0.26 at 55.9, 0.69 off the high and 0.04 up from the low. A very active response to the release of the Fed meeting minutes from March sparked an aggressive sell-off right into the close.

Long liquidation selling hit the market as the US dollar surged, gold fell $35 and the Dow was down 110 points on the day and this sparked a long liquidation selling. The market saw some early selling pressures and traded lower on the day but strength in corn and a minor recovery in outside market forces helped to support a bounce into the mid-session and higher trade on the day.

The early rally pushed the market to the highest level since September 12th before the lower close and the reversal could attract new technical selling pressure. May oil also posted a new high for the move before the lower close. May meal did not make new highs before the weak close.

The Argentina Rosario grains exchange pegged the 2011/12 soybean crop at 43.1 million tonnes, down from 44.5 million as their previous estimate and down from the March USDA estimate of 46.5 million tonnes.


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