CME: Corn Futures Closed Lower Monday

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CME: Corn Futures Closed Lower Monday

08 May 2012

US - July Corn finished down 1/4 at 620, 1 1/4 off the high and 7 3/4 up from the low. December Corn closed up 1/2 at 524 3/4. This was 9 3/4 up from the low and 2 off the high.

July corn closed just 1/4 of a cent lower but well up from the early lows. The strong cash market supported a higher close for the May corn. Ideas that the weather outlook is favorable and that the USDA will release high production, yield and ending stocks estimates in their first supply/demand update for the 2012/13 season on Thursday morning helped to pressure the market early and also helped to push December corn down to match Friday's lows at 515.

December corn closed higher on the day. Traders see corn plantings as of Sunday (for release this afternoon) near 67 per cent complete as compared with 53 per cent last week. Weekly export inspections came in at 29.3 million bushels which was about as expected and this compares with 31.2 million necessary each week to reach the USDA projection.

Strong cash markets continue to help support the May contract with historically high basis bids, record wide May/July inversion and a lack of deliveries against the May contract helping to support. South Korea passed on a tender to buy 55,000 tonnes of corn at a tender indicating prices were too high. For ending stocks for the 2011/12 season, traders see stocks near 750 million bushels as compared with 801 million posted in the April update. For the 2012/13 season, traders see ending stocks near 1.71 billion bushels but with a range of near 1.2 billion to well above 2 billion bushels. July Rice finished up 0.01 at 15.215, equal to the high and 0.115 up from the low.

Soybean Futures Closed Lower

July Soybeans finished down 12 1/2 at 1465 3/4, 13 off the high and 5 1/2 up from the low. November Soybeans closed down 13 1/4 at 1353 1/2. This was 3 1/2 up from the low and 14 1/2 off the high. July Soymeal closed down 6.1 at 426.5.

This was 1.4 up from the low and 7.0 off the high. July Soybean Oil finished down 0.07 at 53.58, 0.19 off the high and 0.32 up from the low. July soybeans closed moderately lower on the session and up a bit from the early lows but old crop soybeans did not recover as much as wheat and corn did late in the session. A bearish tone to outside market forces plus a continued favorable weather outlook helped to spark the early selling pressures.

However, even when outside market forces turned less negative, (set-back in the US dollar and a recovery in equity markets), July soybeans pushed to a new low for the session into the mid-day. News that the fund traders and combined speculator net long positions in the COT report as of May 1st showed a record high net long position helped to keep the tone bearish on thoughts that the market remains overbought.

Traders see soybean plantings as of Sunday near 22 per cent complete as compared with 12 per cent last week. Private exporters reported the sale of 110,000 tonnes of US soybeans to unknown destination for the 2011/12 season. Weekly export inspections came in at 9.99 million bushels which was well under trade expectations near 15 million and this compares with 11 million necessary each week to reach the USDA projection.

Canola stocks in Canada on March 31st fell to a 7-year low at 4.3 million tonnes which was at the low end of expectations and compares with 6.2 million tonnes last year. For ending stocks for the 2011/12 season, traders see stocks near 215 million bushels as compared with 250 million posted in the April update. For the 2012/13 season, traders see ending stocks near 165 million bushels but with a range of near 90 to as high as 250 million bushels.

Wheat Futures Closed Higher

July Wheat finished up 2 1/2 at 612, 2 off the high and 11 1/4 up from the low. December Wheat closed up 3 at 651. This was 11 3/4 up from the low and 1 3/4 off the high. July wheat closed moderately higher on the session and up sharply from the early lows. Bearish outside market forces helped to pressure the market early but the market stayed moderately lower on the day into the mid-session even with a solid recovery in the US stock market and a set-back from the highs for the US dollar. Weakness in corn and soybeans added to the negative tone.

Ideas that the Crop Production and Supply/demand updates on Thursday could bring some bearish supply news plus more rain in the forecast for the southern plains helped to pressure the market. Selling was limited by news from the COT report on Friday of a short-covering trend last week from fund traders who still held a hefty net short position.

Weekly export inspections came in at 24.07 million bushels which was higher than expected and compares with just 16 million necessary each week to reach the USDA projection. Wheat stocks in Canada on March 31st fell to 14.5 million tonnes which at the low end of expectations and compares with 15.8 million tonnes last year. The rally in the corn market to higher on the day helped spark some short-covering in wheat and this helped to provide for the buying support to close higher.

For the report on Thursday, traders see winter wheat production near 1.64 billion bushels as compared with 1.494 billion last year. All wheat production is expected near 2.195 billion bushels as compared with 1.999 billion last year. For ending stocks for the 2011/12 season, traders see stocks near 780 million bushels as compared with 793 million posted in the April update. For the 2012/13 season, traders see ending stocks near 785 million bushels but with a range of near 600-925 million bushels. July Oats closed down 2 1/2 at 337 1/2. This was 2 up from the low and 2 1/4 off the high.