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CME: Corn Futures Finished Down Monday

28 August 2012

US - December Corn finished down 7 3/4 at 800 3/4, 17 1/4 off the high and 1/2 up from the low. March Corn closed down 7 at 801 1/2. This was 1/2 up from the low and 16 off the high.

December corn traded sharply lower into the close and settled at it's lowest level since August 16th. Technical selling and profit taking were noted today and sluggish export inspection numbers added to the downside momentum. Export inspections for the week ending August 27th were reported at 14.46 million bushels vs. 21.51 the week prior and 47.26 million bushels are needed each week to reach the current USDA estimate. The slow sales pace reflects a demand shift from major importers to South American and Black Sea grain. Iowa ethanol margins dropped to a 25 cent per bushel loss from a 17 cent per bushel loss the week prior. The higher trend in corn prices mixed with steady ethanol prices continues to tighten margins for ethanol facilities in Iowa. The corn market received bullish news out of Europe after the European Commission crop monitoring unit cut their corn production estimate to 6.28 tonnes per hectare vs. 6.73 last month and 7.62 last year. Outside markets offered limited direction with the US Dollar steady on the day and US stocks slightly higher.

Soybean

November Soybeans finished down 12 3/4 at 1718 3/4, 41 3/4 off the high and 4 3/4 up from the low. January Soybeans closed down 13 at 1711 1/4. This was 5 3/4 up from the low and 41 1/4 off the high. December Soymeal closed down 4.1 at 518.7. This was 3.4 up from the low and 13.2 off the high. December Soybean Oil finished down 0.34 at 56.56, 1.29 off the high and 0.07 up from the low.

November soybeans traded lower into the close after posting a new high for the move overnight. Soybean meal and oil traded lower as well. The soybean market had a positive tone this morning after gapping higher overnight but technical sell pressure and unwinding of calendar spreads took over soon thereafter. Tropical Storm Isaac has entered the Gulf of Mexico and the storm could push as far north as Arkansas, Western Tennessee, Missouri, and Illinois. High winds and heavy rainfall could have a negative impact on maturing row crops but could aid Mississippi water levels in the short term. The 6-10 day forecast calls for a return of above normal temperatures and below normal rainfall for the central US. Spot soybean basis at various Iowa elevators fell today as farmer sales have picked up since last week. This added pressure to calendar spreads. Export inspections for the week ending August 27th were reported at 17.40 million bushels vs. 21.43 the week prior. The current inspection pace for 2011/12 now exceeds the pace needed to reach the USDA estimate. The 5 year average at this time of the crop year is 98%. Outside markets offered limited direction with the US Dollar steady on the day and US stocks slightly higher.

Wheat

December Wheat finished down 7 1/4 at 881 1/4, 18 off the high and 1/4 up from the low. March Wheat closed down 6 1/2 at 892. This was 1/2 up from the low and 17 1/4 off the high.

December Chicago wheat traded sharply lower into the close today while the July 2013 contract only saw marginal loses. Kansas City and Minneapolis wheat ended the day lower as well. The wheat market struggled to hold a firm footing today after weather conditions for most US wheat growing areas were seen as a negative force. The fact that Egypt bought another round of Black Sea wheat over the weekend and corn has taken on a slightly negative, short term tone weighted on the wheat market. Export inspections for the week ending August 27th were reported at 18.88 million bushels vs. 23.42 the week prior and 24 million bushels are needed each week to reach the current USDA estimate. The export pace is 19% of the USDA estimate vs. the 5 year average of 23%. Rainfall in Australia continues to disappoint which offered underlying support to the complex. Private analyst's now suggest that Western Australia winter wheat production could fall near 6 million tonnes from the 11.6 million tonnes seen last year. The next 2-3 weeks will be a critical period of growth for their wheat crop. Outside markets offered limited direction with the US Dollar steady on the day and US stocks slightly higher.

December Oats closed down 4 1/2 at 387. This was 7 up from the low and 9 1/4 off the high.


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