CME: Corn Futures Closed Lower Wednesday

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CME: Corn Futures Closed Lower Wednesday

03 May 2012

US - July Corn finished down 17 1/2 at 611 1/2, 17 1/2 off the high and 1 1/2 up from the low. December Corn closed down 7 3/4 at 531. This was 2 3/4 up from the low and 9 off the high.

July corn closed sharply lower on the session as fund traders selling intensified late in the day. A bearish weather outlook, continued talk of higher yield potential for the new season and a sharp set-back in wheat were all factors to spark long liquidation selling in corn again yesterday.

Once again, traders are indicating that US corn is expensive to wheat, Argentina corn and Brazil corn. In addition, there is talk that the Brazil corn crop could be higher than expected for next week's USDA update. Extra corn was planted after the first soybean crop came in below expectations and early.

Private exporters reported the sale of 130,000 tonnes of US corn to unknown destination for the 2012/13 season. South Korea bought 58,000 tonnes of corn. Ethanol production for the week ending April 27th averaged 894,000 barrels per day.

This is up 3.3 per cent vs. last week and up 2.17 per cent vs. last year. Total Ethanol production for the week was 6.258 million barrels. Corn used in last week's production is estimated at 95.2 million bushels. Corn use needs to average 94.2 million bushels per week to meet the USDA projection. Stocks were 22.2 million barrels. This is up 1.7 per cent vs. last week and up 12.4 per cent vs. last year. July Rice finished down 0.165 at 14.855, 0.155 off the high and equal to the low.

Soybean Futures Closed Lower

July Soybeans finished down 18 1/2 at 1485, 27 1/2 off the high and 4 up from the low. November Soybeans closed down 24 1/4 at 1368 1/4. This was 5 3/4 up from the low and 26 1/4 off the high. July Soymeal closed down 4.5 at 429.7. This was 1.4 up from the low and 7.9 off the high.

July Soybean Oil finished down 0.2 at 54.71, 0.78 off the high and 0.1 up from the low. July soybeans pushed to a new contract high of 1512 1/4 before closing down 18 1/2 cents on the day at 1485. The reversal after taking out the range of the past three trading sessions is seen as a negative technical development.

The outlook for good moisture in the next 10 days across much of the plains and Midwest plus continued talk of the overbought condition of the market helped to pressure early in the session. However, buyers emerged on the early set-back for old crop soybeans to help support the market above yesterday's lows and the buying continued into the mid-session to drive July soybeans to moderately higher on the day and to a new high for the move.

The sharp break in wheat, and then corn due to the weather impact eventually attracted a long liquidation selling trend in soybeans to drive the market sharply lower into the close. Private exporters reported the sale of 204,000 tonnes of US soybeans to unknown destination for the 2012/13 season.

In addition, China bought 30,000 tonnes of US soybean oil for the 2011/12 season. News of more buying from China helped spark a strong move higher in the soybean oil market to support the rally before selling emerged to push the market lower into the close.

A lack of deliveries and talk that the tightening supply of meal from South America will boost demand for US meal helped drive July meal to a new high for the move but the reversal and lower close is seen as a negative technical development.

Wheat Futures Closed Lower

July Wheat finished down 28 1/2 at 614 1/2, 27 1/4 off the high and 2 3/4 up from the low. December Wheat closed down 26 at 653 3/4. This was 2 1/2 up from the low and 24 off the high. July wheat opened slightly lower and closed sharply lower on the day with aggressive fund selling noted late in the day.

The market experienced the lowest close since September 14th of 2009. Traders see very high yield potential for the winter wheat crop and the weather outlook suggests improving crop conditions ahead. A strong US dollar and weakness in energy, metal and equity markets added to the bearish tone.

Crop tour participants in Kansas see record yield potential and the spring wheat crop is off to an excellent start. July KC wheat took out the April lows to move to a new low for the move. Minneapolis July wheat fell sharply and pushed to the lowest level since November 26th of 2010.

Iran bought 60,000 tonnes of wheat from Australia and Lebanon is tendering for 50,000 tonnes of milling wheat. July Oats closed down 8 at 337 1/4. This was 1/2 up from the low and 9 1/4 off the high.