CME: Corn Futures Closed Mostly Unchanged Monday23 October 2012
US - December Corn finished down 1/4 at 761 1/4, 5 3/4 off the high and 2 1/2 up from the low.
March Corn closed down 1/4 at 759 1/4. This was 2 3/4 up from the low and 5 3/4 off the high.
December corn traded both sides of the unchanged today and saw support from a lower US Dollar and surging soybean prices. Outside markets deteriorated throughout the day however which limited gains.
The demand influences continue to be mixed for the corn market as the US export pace continues to add momentum to the bear camp.
Export inspections for the week ending October 18th were reported at 9.6 million bushels which was down from 17.2 last week. Cumulative export inspections are only 9.8% of the USDA export estimate vs. the 5 year average of 13%. Export inspections need to average 26 million bushels in order to reach this year's USDA estimate.
Traders are beginning to become a bit more optimistic towards US exports after the EU approved a GMO corn variety that will allow Brazil corn to be imported. The approval by the EU is a signal that corn and wheat supply is tightening in Europe.
Rising cash prices in South America along with the potential for a demand shift from Asian importers to the US could be supportive to corn over the next 3-6 months. South American corn continues to trade at a discount to US but Ukraine's recent ban on wheat exports could limit additional sales of corn.
The tightening global grain balance sheet may suggest that US corn exports will be needed long term which could be supportive to prices if realized.
Wheat Futures Closed Higher
December Wheat finished up 5 3/4 at 878 1/4, 6 1/4 off the high and 6 3/4 up from the low. March Wheat closed up 6 1/2 at 890 1/4. This was 7 1/4 up from the low and 5 1/2 off the high.
December Chicago wheat traded marginally higher on the day seeing support from a weaker US Dollar but resistance continues to come from US wheat's uncompetitive price structure in the global market.
Kansas City and Minneapolis wheat traded higher on the session as well.
The higher trade overnight carried over to this afternoon but a weaker Crude Oil market and along with softer trade in other commodity markets weighed on price gains. Initial support continues to come from a more positive outlook for US exports after Ukraine announced it would ban wheat exports by November 15th.
Export Inspections for the week ending October 18th were pegged at 16.4 million bushels which was up from last week's 7 million bushels but well behind the 25 million needed each week to reach this crop years USDA forecast. The current export pace is just 33% of the USDA export estimate vs. the 5 year average of 42%. The report was considered slightly supportive since most in the trade expected a number near 13 million bushels.
It was announced this morning that Syria bought 100,000 tonnes of Black Sea wheat in their tender and it's being reported that Romania and Hungary were the cheapest offers for the 50,000 tonne Iraq tender. This added to the short term resistance in price action today.
Taiwan Flour Mills issued a tender to buy 104,000 tonnes of milling wheat that can be sourced from the US or Europe so the trade will wait for results tomorrow.
Soybean Futures Closed Higher
November Soybeans finished up 12 1/4 at 1546 1/2, 12 off the high and 20 up from the low. January Soybeans closed up 12 3/4 at 1549 1/4. This was 20 1/4 up from the low and 12 off the high.
December Soymeal closed up 7.2 at 471.0. This was 9.7 up from the low and 1.2 off the high.
December Soybean Oil finished up 0.08 at 51.66, 0.57 off the high and 0.42 up from the low.
November soybeans traded higher on the day but settled off the session highs made overnight. Soybeans spent the day in a choppy range as markets were pushed around by strong demand fundamentals mixed with negative outside markets.
This afternoons Harvest Progress report is expected to show that harvest is 82% complete vs. the 5 year average of 71%.
The strong harvest, firm cash markets, and explosive export demand continues to add underlying support to prices.
Export inspections for the week ending October 18th were reported at 61.4 million bushels vs. 57.8 last week. Total inspections are now 22% of the current USDA export estimate vs. the 5 year average of 11.5%. Even more impressive is that only 19 million bushels are needed each week to reach this crop years USDA export estimate.
The South American weather outlook is providing a mixed influence to futures. Heavy rain in Argentina over the weekend is causing concern that planting will be delayed but better rainfall for dry areas of Brazil should help moisture deficits.
Physical traders noted that soybean movement was quiet to start the week but farmer sales have stalled as they await higher cash prices.
TheCropSite News Desk