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CME: Corn Futures Closed Lower Wednesday

05 April 2012

US - May Corn finished down 1 1/2 at 656 3/4, 7 off the high and 6 up from the low. July Corn closed down 2 1/4 at 650 3/4. This was 5 3/4 up from the low and 7 1/4 off the high.

May corn closed slightly lower on the session but still managed to gain on July corn and the move under yesterday's lows failed to attract new selling interest. Outside market forces were clearly negative this morning but talk of strong cash basis levels and the continued lack of producer selling has helped to support the market early Wednesday.

Active producer fieldwork is keeping producers who have held old crop corn this far away from new cash sales in spite of the recent strong gains and the strong cash basis. South Korea bought a cargo of 59,000 tonnes of US corn and passed on tenders for an additional 140,000 tonnes. Ethanol production for the week ending March 30th averaged 873,000 barrels per day.

This is down 1.8 per cent vs. last week and down 3.2 per cent vs. last year. Total Ethanol production for the week was 6.111 million barrels. Corn used in last week's production is estimated at 92.99 million bushels.

Corn use needs to average 94.18 million bushels per week to meet this crop year's USDA estimate of 5 billion bushels. Stocks were 22.55 million barrels. This is down 0.3 per cent vs. last week and up 12.4 per cent vs. last year. May Rice finished down 0.025 at 14.905, 0.015 off the high and 0.225 up from the low.

Wheat Futures Closed Lower

May Wheat finished down 18 3/4 at 639 1/4, 19 1/2 off the high and 3 3/4 up from the low. July Wheat closed down 19 1/4 at 649 3/4. This was 4 up from the low and 19 3/4 off the high. May wheat closed sharply lower on the session and has given back near half of the gains from the past week as weather and outside market forces helped to spark fairly aggressive selling on the day.

July KC wheat was down more than 20 cents by the close. The sharp break in gold and equity markets along with a jump in the US dollar and continued talk of good weather to see improving crops ahead helped to pressure the market early. Rain in the forecast for parts of Europe which have been dry and ideas that the late rally yesterday was overdone and included active fund short-covering from fund traders helped to pressure the market Wednesday as well.

There are some concerns for the soft red crop in parts of the eastern Corn Belt into the middle of next week with freezing temperatures possible but many traders see little damage and/or the need for the forecast to get colder in order to cause much damage. Spain producers are hoping for good rains in April and May to avoid crop damage from the driest winter in 65 years. May Oats closed down 1 at 335. This was 2 3/4 up from the low and 3 off the high.

Soybean Futures Closed Higher

May Soybeans finished up 2 3/4 at 1419 1/2, 10 1/4 off the high and 11 1/4 up from the low. July Soybeans closed up 2 1/2 at 1423 3/4. This was 11 up from the low and 10 off the high. May Soymeal closed up 1.7 at 388.2. This was 2.4 up from the low and 4.5 off the high.

May Soybean Oil finished up 0.12 at 56.02, 0.43 off the high and 0.32 up from the low. May soybeans shook off the bearish tilt to outside markets to close slightly higher on the session. More private projections for smaller South America crops and the "need" for soybeans to gain on most other crops in order to secure higher planted area that the March USDA planted acreage intentions has helped to provide underlying support.

A bearish tilt to outside markets helped to pressure the market early Wednesday with a sharp drop in gold, crude oil and the stock market early plus a strong US dollar helped to spark selling pressures.

Continued downgrades of the crops in Brazil and a firm tone to the corn market helped to turn the market higher and futures pushed sharply higher on the day into the mid-session. Taiwan is tendering for 40,000 to 60,000 tonnes of US or Brazil soybeans for May/June shipment.

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