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CME: Corn Futures Closed Higher Thursday

12 October 2012

US - December Corn finished up 36 1/2 at 773 1/4, 2 3/4 off the high and 39 1/2 up from the low. March Corn closed up 35 1/2 at 773 1/4. This was 38 3/4 up from the low and 2 1/2 off the high.

The USDA report this morning was considered bullish against trade expectations and December corn traded sharply higher on the day and nearly posted a limit move higher.

US ending stocks were pegged at just 619 million bushels which was down from 733 million last month. The average US corn yield was reported at 122 bushels/acre compared with 122.8 last month.

Corn production was pegged at 10.706 billion bushels which was 105 million above trade expectations and compared with 10.727 last month.

Furthermore, total demand declined by just 100 million bushels due to lower exports. Long term headwinds may remain for the corn market with export demand lagging the pace needed to meet this year's forecast and negative ethanol margins for many areas of the US Midwest remain.

Ethanol production for the week ending October 5th averaged 800,000 barrels per day. This was up 1.9 per cent vs. last week and down 6.9 per cent vs. last year.

Corn used in last week's production was estimated at 84 million bushels however this fell just short of the 86.45 million bushels per week that is needed to meet this crop year's USDA estimate of 4.5 billion bushels which was left unchanged on today's USDA report.

November Rice finished down 0.05 at 14.975, 0.095 off the high and equal to the low.

Soybean Futures Closed Higher

November Soybeans finished up 25 1/4 at 1548 1/2, 19 1/2 off the high and 27 1/4 up from the low. January Soybeans closed up 24 3/4 at 1548 1/2. This was 26 3/4 up from the low and 18 1/4 off the high.

December Soymeal closed up 9.6 at 472.2. This was 10.4 up from the low and 7.3 off the high.

December Soybean Oil finished up 0.7 at 51.33, 0.96 off the high and 0.74 up from the low.

November soybeans traded sharply higher throughout the day and the positive trade followed a USDA report that was considered slightly bullish against traded expectations.

The USDA pegged US soybean production at 2.86 billion bushels which was 101 million bushels above trade expectations and compares with the September estimate of 2.634.

The initial increase in production was considered bearish but the report also showed an increase in domestic crush demand by 40 million bushels and exports by 210 million bushels to offset the increase in overall supply.

This left ending stocks at 130 million bushels vs. traded expectations of 130 million bushels. The average US soybean yield rose to 37.8 bushels per acre vs. trade estimates of 37.

Long term support in soybeans comes from consistent demand from China and an explosive export sales pace so far this year. China soybean imports were increased to 61 million tonnes vs. 59.50 in September.

Wheat Futures Closed Higher

December Wheat finished up 16 1/4 at 886, 8 off the high and 27 up from the low. March Wheat closed up 16 at 897. This was 26 1/2 up from the low and 7 1/2 off the high.

December Chicago wheat traded sharply higher on the day along with KC and Minneapolis wheat. The USDA report for wheat was considered neutral but the rally in other grains supported the bounce.

World ending stocks for the 2012/13 season came in at 173 million tonnes as compared with 176.7 million last month and vs. trade estimates of 172.81 million tonnes. Total FSU production was estimated at 77.71 million tonnes vs. 78.96 last month.

Australian production was cut by 3 million tonnes to 23 million tonnes which was in line with market estimates. US all wheat carryout was also cut to 654 million bushels which was 24 million bushels above market expectations but below the September estimate of 698.

Long term headwinds remain for wheat as it remains uncompetitive in the world wheat market but the prospects of better feed wheat demand could support.

The EU granted export licenses for 376,000 tonnes of soft wheat today which takes the total for this crop year to 4.2 million tonnes vs. 4.05 for the same time period last year and the government of Argentina expects wheat production near 10.12 million tonnes vs. 11.50 by the USDA. This was slightly supportive to the trade midday.

December Oats closed up 5 at 388 1/2. This was 7 up from the low and 6 1/2 off the high.

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