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CME: Corn Futures Closed Slightly Lower Wednesday

CME: Corn Futures Closed Slightly Lower Wednesday

11 October 2012

US - December Corn finished down 5 1/4 at 736 3/4, 6 3/4 off the high and 4 1/2 up from the low. March Corn closed down 4 1/2 at 737 3/4. This was 4 3/4 up from the low and 5 3/4 off the high.

December corn traded slightly lower on the day and saw pressure from a sharply lower soybean market. Modest support was provided by a stronger wheat market throughout the day.

The trade is expecting a US average corn yield near 123 bushels per acre vs. the September estimate of 122.80 in tomorrow's USDA report. Production is expected to fall near 10.600 billion bushels vs. 10.727 in September.

The market is also assuming beginning stocks of 988 million bushels which was revised lower from 1.181 billion bushels on the September 1st Quarterly stocks report. The stocks report suggested that US corn domestic feed usage may need to be adjusted higher by 100 million bushels or more.

Corn basis in the Gulf of Mexico fell today as weak export demand continues to limit gains. Basis in the interior of the Corn Belt was steady as harvest finishes up in various regions and farmers have lost interest in selling more grain due to the recent slide in prices.

Outside markets were mixed on the day with US Stocks lower, crude oil lower, and the US Dollar steady.

Wheat Futures Closed Slightly Higher

December Wheat finished up 5 1/2 at 869 3/4, 7 off the high and 6 1/4 up from the low. March Wheat closed up 5 1/4 at 881. This was 6 up from the low and 7 off the high.

December Chicago wheat traded slightly higher on the day along with KC and Minneapolis wheat. Early support came from a lower US Dollar and additional momentum due to dry conditions for a portion of the western plains, and some suggest that North America may see better export demand in the second half of the crop year.

Wheat markets found a bit of bullish news overnight after the French Farm office cut its estimate for French soft wheat stocks to 1.8 million tonnes, which was down 600,000 from their September estimate and the lowest level in 13 years. France exported 1.4 million tonnes of soft wheat in August which brings the total for this marketing year to 2.2 million tonnes.

The market expects this pace to increase over the next quarter as they sell wheat to customers that were previously supplied by the Black Sea shippers.

Traders will keep a close eye on cuts in production for world exporters and the impact those cuts will have on world ending stocks in tomorrow's USDA report. World ending stocks for 2012/13 are estimated at 176.71 million tonnes and most in the trade estimate the report will show ending stocks just under 173.

Traders anticipate cuts in production of 2-4 million tonnes in Australia and the USDA currently has the crop pegged at 26 million tonnes.

Soybean Futures Closed Sharply Lower

November Soybeans finished down 26 3/4 at 1523 1/4, 26 3/4 off the high and 5 1/4 up from the low. January Soybeans closed down 25 1/2 at 1523 3/4. This was 5 3/4 up from the low and 25 1/4 off the high.

December Soymeal closed down 8.4 at 462.6. This was 2.8 up from the low and 8.1 off the high.

December Soybean Oil finished down 0.62 at 50.63, 0.92 off the high and 0.07 up from the low.

November soybeans traded sharply lower and made a new low for the week as traders took profits ahead of a USDA report that many feel will show an increase in the average US soybean yield and production. The trade is expecting a US average soybean yield near 37 bushels per acre vs. the September estimate of 35.3. Production is expected to rise to near 2.75 billion bushels vs. 2.63 in September.

Despite the lower trade midday, many in the market believe that any increase in the average soybean yield and production will be offset slightly by increases in demand. Soybean demand continues to be robust and it the USDA announced this morning that US private exporters sold 120,000 tonnes of soybeans to China for 2012/13 delivery.

Soybean basis has held steady to firm in the Gulf of Mexico despite the selloff in futures, however basis bids in areas of Corn Belt have declined as harvest advances.

Outside markets were mostly negative on the day with US stocks trading lower along with crude oil.


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