CME: Corn Futures Closed Lower Wednesday

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CME: Corn Futures Closed Lower Wednesday

19 April 2012

US - July Corn finished down 13 1/4 at 594, 15 1/4 off the high and 2 1/4 up from the low. December Corn closed down 1 at 528 3/4. This was 3 1/2 up from the low and 4 1/4 off the high.

Corn closed sharply lower on the day for old crop and just slightly lower on the session for new crop and May corn pushed down to the lowest level since January 18th and matched the lows from this date.

Funds were noted as active sellers on the session and the July/December spread pushed down to just 65 cent premium July from a premium of $1.07 1/2 on April 3rd.

A negative tilt to outside market forces helped to spark the early weakness and then fund traders and spread traders were liquidating old crop corn longs and also old crop/new crop spreads which helped spark heavy selling in the May and July contracts.

A bearish weather outlook for planting next week after a little more rain on the weekend kept the market on the defensive. A strong US dollar and weakness in energy and metal markets added to the negative tone. Ethanol production for the week ending April 13th averaged 884,000 barrels per day.

This is down 1.3 per cent vs. last week and up 3.3 per cent vs. last year. Corn used in last week's production is estimated at 94.17 million bushels. Corn use needs to average 94.117 million bushels per week to meet this crop year's USDA estimate of 5 billion bushels.

Stocks were 21.9 million barrels. This is up 0.9 per cent vs. last week and up 9.3 per cent vs. last year. South Korea bought 65,000 tonnes of optional origin corn. The weekly Corn Planting report showed that 17 per cent of the crop is planted compared to 7 per cent last week and 5 per cent last year.

The 10 year average for this time of year is 7 per cent. The highest percent complete prior to this year was 14 per cent in 2004.

Illinois was 41 per cent complete as compared with 6 per cent as the 5-year average. Traders see weekly export sales, for release before the opening, near 825,000 tonnes as compared with 975,800 tonnes last week. July Rice finished down 0.08 at 15.74, 0.01 off the high and equal to the low.

Soybean Futures Closed Lower

July Soybeans finished down 18 at 1413 1/2, 26 1/2 off the high and 4 up from the low. November Soybeans closed down 17 3/4 at 1337 3/4.

This was 5 3/4 up from the low and 24 3/4 off the high. July Soymeal closed down 3.4 at 393.9. This was 3.9 up from the low and 5.1 off the high. July Soybean Oil finished down 0.56 at 55.6, 0.88 off the high and 0.05 up from the low.

May and July soybeans closed 18 cents lower on the session as fund traders were noted as active with lows of the day posted in early trade. The firm US dollar and weakness in energy and metal markets early yesterday was enough to spark a long liquidation selling trend for soybeans.

Continued talk that the market is overbought, record open interest and talk that China may soon slow their import buying helped to spark the selling.

While traditional technical indicators such as RSI have corrected from overbought readings to nearly oversold readings and the market is down as much as 65 cents from the April 3rd peak, open interest has seen a steady uptrend to reach another new record high of 811,832 contracts from 551,998 contracts on March 1st.

Private exporters reported a sale of 120,000 tonnes of US soybeans to China for the 2012/13 season. The early break pushed the market to the lowest level since March 30th. Traders see weekly export sales, for release before the opening, near 975,000 tonnes as compared with 636,400 tonnes last week.

Wheat Futures Closed Lower

July Wheat finished down 4 1/2 at 615 3/4, 7 1/2 off the high and 6 1/2 up from the low. December Wheat closed down 1 1/4 at 654 1/2. This was 7 1/4 up from the low and 7 1/4 off the high. July wheat closed 4 1/2 cents lower on the session but up 6 1/2 cents from the lows.

Improving crop conditions, a fast start to the spring wheat plantings and a lack of threatening weather were factors to help pressure the market early in the session.

However, a lack of new significant selling interest on the move to the lowest level since December 19th, talk that US wheat is competitive on the world market and talk of the cheap price of wheat relative to corn helped spark the rally to near unchanged on the day into the mid-session.

Jordan bought 50,000 tonnes of wheat in a tender for 100,000. The weekly Winter Wheat Conditions report showed that 64 per cent of the crop is rated good/excellent compared to 61 per cent last week and 36 per cent last year. The 10 year average for this time of year is 49 per cent.

The highest percent rated good/excellent was 78 per cent in 1993. Ohio slipped 4 per cent to 46 per cent but Kansas jumped to 69 per cent good to excellent from 65 per cent last week and 26 per cent last year. The weekly Spring Wheat Planting report showed that a whopping 37 per cent of the crop is planted compared to 21 per cent last week and 5 per cent last year.

The 10 year average for this time of year is 11 per cent. The highest percent complete prior to this year was 27 per cent in 1992. North Dakota is 27 per cent complete from 0 per cent last year and Minnesota is 56 per cent complete from 0 per cent last year. Traders see weekly export sales, for release before the opening, near 550,000 tonnes. July Oats closed down 3/4 at 322 3/4. This was 3/4 up from the low and 2 1/4 off the high.