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CME: Corn Futures Closed Lower Wednesday

23 August 2012

US - December Corn finished down 4 at 834 3/4, 4 3/4 off the high and 6 1/2 up from the low. March Corn closed down 4 1/2 at 833 1/4. This was 5 3/4 up from the low and 5 1/4 off the high.

December corn closed slightly lower on the day and well off session lows. Traders continue to monitor yield and condition reports as a large crop tour moves across the Corn Belt today.

Early yield reports have been worse than expected, which has traders questioning if the US average corn yield could be near 121 bushels per acre vs. the current USDA estimate of 123.4.

If achieved, production could fall to an 8 year low which would mean further demand cuts across the balance sheet. Ethanol production for the week ending August 17 averaged 823,000 barrels per day which is down 8.96% from last year.

Total Ethanol production for the week was 5.76 million barrels vs. 5.73 the week prior. Corn used in last week's production is estimated at 87.67 million bushels which was the 4th consecutive week corn usage has increased.

News that Argentina grain and vegetable oil exports have been halted for 3 days due to a strike offered support to the grain complex.

The US Dollar traded slightly higher midday but the gains were erased after the FOMC minutes suggested that further monetary easing may be needed to jump start the US economy.

The US Dollar turned lower for the remainder of the session and corn climbed off it's session lows. November Rice finished down 0.135 at 15.865, 0.035 off the high and equal to the low.

Soybean Futures Closed Lower

November Soybeans finished down 4 3/4 at 1727 3/4, 6 1/2 off the high and 12 1/4 up from the low. January Soybeans closed down 5 1/2 at 1715.

This was 11 up from the low and 7 1/2 off the high. December Soymeal closed down 4.8 at 519.7. This was 3.9 up from the low and 6.1 off the high. December Soybean Oil finished up 0.61 at 56.83, 0.16 off the high and 1.16 up from the low.

November soybeans traded lower into the closing bell and settled off session lows. Soybean meal was lower on the day but soybean oil traded sharply higher, posting a new high for the move. Soybeans continue to see support from strong export demand and questionable yields across the Corn Belt.

News that Argentina grain and vegetable oil exports have been halted for 3 days due to a strike offered support to the grain and oilseed complex.

The US Dollar traded slightly higher midsession which offered resistance to price gains but dovish comments by the FOMC turned the US Dollar lower and commodity prices recovered into the closing bell.

Early yield reports from a large crop tour have been worse than expected for some areas, but rainfall and cooler temperatures in early August have benefited portions of the soybean crop.

The trade feels the average US soybean yield could be near 36.5 bushels per acre vs. the August USDA estimate of 36.1. If attained, this could mean total supply for 2012/13 of 2.7 billion bushels.

Wheat Futures Closed Lower

December Wheat finished down 5 at 917, 4 1/4 off the high and 5 3/4 up from the low. March Wheat closed down 4 3/4 at 925 1/4.

This was 5 1/4 up from the low and 3 3/4 off the high. December Chicago Wheat closed slightly lower on the day. Kansas City and Minneapolis wheat settled lower as well.

Wheat found support on reports that the European Union soft wheat crop may produce 125 million tonnes for 2012/13 which is down 3% from 2011 but traders took profits early in the day on reports that hard red winter wheat areas are expected to see good rainfall in the next 7-10 days.

The rainfall is expected to help topsoil conditions as farmers begin to plant next year's wheat crop. Farmers in Argentina will plant 3.6 million hectares of wheat for the 2012/13 marketing year. This was unchanged from a July estimate.

Argentina wheat plantings have declined year over year due to better prices for other cash crops and frustration with the Argentina government wheat export quota system.

The US Dollar traded slightly higher midday but the gains were erased after the FOMC minutes suggested that further monetary easing may be needed to jump start the US economy.

The US Dollar turned lower for the remainder of the session and wheat climbed off it's session lows. December Oats closed down 1 1/2 at 395 1/2. This was 4 1/4 up from the low and 2 1/2 off the high.


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