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CME: Corn Futures Closed Lower Thursday

24 August 2012

US - December Corn finished down 20 at 814 3/4, 24 off the high and 2 1/2 up from the low. March Corn closed down 19 at 814 1/4. This was 2 1/2 up from the low and 23 off the high.

December corn traded sharply lower into the close after a closely followed crop tour reported better than expected corn yields in Illinois and Indiana the last two days.

The tour made their way through Minnesota today and reports were worse than expected but technical selling and unwinding of calendar spreads forced December corn to a fresh 3 day low.

The corn market saw positive news after the International Grains Council cut its forecast for global corn production by 26 million tonnes to 838 million tonnes.

The cut in production is 11 million tonnes lower than the current USDA estimate. Net weekly export sales were in line with market estimates. Corn came in at 108,400 tonnes for the current marketing year and 217,000 for the next marketing year for a total of 325,400.

As of August 16, cumulative corn sales stand at 24 per cent of the USDA forecast for 2012/2013 vs. a 5 year average of 19 per cent. Outside markets offered no direction today with the US Dollar trading lower, metals higher, and crude oil lower. November Rice finished down 0.16 at 15.705, 0.045 off the high and 0.025 up from the low.

Soybean Futures Closed Lower

November Soybeans finished down 12 3/4 at 1715, 29 3/4 off the high and 10 3/4 up from the low. January Soybeans closed down 9 at 1706. This was 12 up from the low and 26 1/2 off the high. December Soymeal closed down 4.4 at 515.3.

This was 4.3 up from the low and 10.8 off the high. December Soybean Oil finished down 0.06 at 56.77, 0.43 off the high and 0.42 up from the low. November soybeans closed sharply lower on the day but off session lows. Soybean meal traded weaker, in line with soybeans, however soybean oil only saw marginal loses.

Pressure came from technical selling and profit taking in calendar spreads. Spot basis bids for soybeans softened at processing facilities in the Midwest after farmer selling increased as futures rose earlier this week.

A large crop tour continues to report below average pod counts and poor plant conditions today. Crop scouts are citing small plants and aborted pods. Net weekly export sales for soybeans totaled 718,700 tonnes which was in line with market estimates.

As of August 16, cumulative soybean sales stand at 56 per cent of the USDA forecast for 2012/2013 versus a 5 year average of 26 per cent. The strong pace of sales reflects the robust demand from China in the last month.

Total net meal sales came in at 345,400 tonnes and net oil sales totaled 5,200 tonnes. Outside market offered no direction with crude oil trading lower along with the US Dollar.

Wheat Futures Closed Lower

December Wheat finished down 22 1/4 at 894 3/4, 29 1/4 off the high and 1 3/4 up from the low. March Wheat closed down 21 at 904 1/4. This was 3 up from the low and 27 1/4 off the high.

December Chicago wheat saw massive losses today and closed near the lows of the day. Kansas City and Minneapolis wheat traded sharply lower as well. Early morning gains were wiped away after technical selling commenced in the corn market.

Sell pressure was also linked to unwinding of calendar spreads. The wheat market saw support, early in the day after a private Russian grain analyst pegged Russian wheat production at 39 million tonnes. The International Grains Council also cut their wheat production forecast for Russia by 4 million tonnes to 41 million tonnes. Both estimates are near the low end of trader estimates.

Russian wheat yields have fallen 31.5 per cent from last year to 2.07 tonnes per hectare as of August 23rd. Export sales fell in line with market expectations with total net weekly sales of 474,800 tonnes.

As of August 16, cumulative wheat sales stand at 32 per cent of the USDA forecast for 2012/2013 vs. a 5 year average of 40.5 per cent. The US Dollar traded lower on the day but offered no support to the grain complex. December Oats closed down 4 1/2 at 391. This was 1 1/2 up from the low and 4 3/4 off the high.


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