News

CME: Corn Futures Closed Lower Wednesday

10 May 2012

US - July Corn finished down 15 3/4 at 607 1/4, 15 3/4 off the high and 1 3/4 up from the low. December Corn closed down 11 1/4 at 516 3/4. This was 1 3/4 up from the low and 12 off the high. July corn saw another round of aggressive selling late in the day to close sharply lower on the day and to the lowest close since April 25th.

Continued demand fears coming out of Europe plus a bearish weather forecast for the Midwest helped spark the aggressive sell-off ahead of the key USDA Supply/Demand update for tomorrow. December corn closed sharply lower and matched the lows from Monday and Friday as traders expect the first outlook for the new crop season to show a surge in US ending stocks for the 2012/13 season.

US cash traders indicate that China has bought near 8 cargoes or about 500,000 tonnes of US corn in the past week. Traders await confirmation on the daily wires. Ethanol production for the week ending May 4th averaged 897,000 barrels per day. This is up 0.34 per cent vs. last week and up 4.06 per cent vs. last year. Total Ethanol production for the week was 6.279 million barrels which is the highest weekly total since March 2nd.

Corn used in last week's production is estimated at 95.55 million bushels as compared with 94 million bushels per week necessary to meet the USDA estimate for the year. Stocks were 21.4 million barrels. This is down 3.8 per cent vs. last week and up 4.6 per cent vs. last year. The implied demand for the week is 7.127 million barrels which would be the highest since December 9th. For the report in the morning, traders see US ending stocks for the 2011/12 season 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. World ending stocks for the 2011/12 season are expected to drop to near 122 million tonnes from 122.71 million last month. Stocks for the new crop season are expected to recovery to near 137 million tonnes. For the weekly export sales, traders see corn sales near 1.2 million tonnes as compared with 3.472 million last week. July Rice finished up 0.1 at 15.395, 0.045 off the high and 0.185 up from the low.

Soybean Futures Closed Lower

July Soybeans finished down 8 at 1430 1/4, 11 1/2 off the high and 17 up from the low. November Soybeans closed down 7 at 1333 1/2. This was 15 up from the low and 12 3/4 off the high. July Soymeal closed down 1.3 at 416.0. This was 7.6 up from the low and 3.1 off the high. July Soybean Oil finished down 0.45 at 52.82, 0.73 off the high and 0.02 up from the low. July soybeans closed moderately lower on the session but the market saw a very strong recovery from the early lows.

Funds were noted as massive sellers; especially early yesterday. Eurozone debt concerns were a key negative force for the market early yesterday as a sharp break in global equity markets and a surge higher in the US dollar helped spark a continued long liquidation selling trend early yesterday. The selling left July soybeans down as much as 99 1/4 cents in just six trading sessions. Outside markets turned much less negative into the mid-session which helped support the very strong recovery off of the lows into the mid-session with July down just a few cents on the day.

Soybean oil was slightly higher on the day into the mid-session but closed sharply lower while meal saw the lows early and closed slightly lower on the session but near the highs of the day. For the report, traders see Argentina production down to near 42 million tonnes from 45 million last month and Brazil production near 64.5 million tonnes from 66 million last month. As a result, world ending stocks for the 2011/12 season are expected to drop to near 53.3 million tonnes from 55.52 million last month.

Stocks for the new crop season are expected to recovery to near 59.3 million tonnes. US ending stocks for the 11/12 season are seen near 215 million bushels as compared with 250 million posted in the April update. For 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. For the weekly export sales, traders see soybean sales near 1.32 million tonnes as compared with 1.732 million last week.

Wheat Futures Closed Lower

July Wheat finished down 15 at 600, 18 off the high and 1 3/4 up from the low. December Wheat closed down 13 1/2 at 639. This was 1 3/4 up from the low and 16 1/4 off the high. July wheat closed sharply lower on the session and managed to push into new contract lows late in the day. The surge in the US dollar and selling across a wide spectrum of commodity markets helped to pressure the market early yesterday.

Traders look for another rain event in the western and southern plains late in the weekend to help support a continued high yield potential for the central plains. Traders see a hefty production total for the crop production report in the morning and the selling in corn seemed to have opened the door for more aggressive selling. Even a strong recovery in the US stock market and energy markets failed to provide much support to the market. For the reports tomorrow morning, 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. For the weekly export sales, traders see wheat sales near 600,000 tonnes as compared with 711,600 tonnes last week. July Oats closed down 1 3/4 at 336. This was 2 up from the low and 3 1/4 off the high.