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CME: Corn Futures Closed Higher Tuesday

17 April 2013

US - May Corn finished up 16 1/2 at 663 1/4, 3/4 off the high and 22 1/4 up from the low. July Corn closed up 12 3/4 at 640 3/4. This was 19 up from the low and 1 off the high.

May corn traded sharply higher on the day and recouped a portion of yesterday's steep decline that was triggered mostly by poor macro-market influences.

December corn lost to the old crop contracts and traded higher on the day. Bull spreads were active due to strong US cash markets in the interior of the US with very little new sales being made from producers.

Export basis values in the Gulf were steady on light export demand and Argentina remains about a $37 per tonne discount to the US which continues to have a detrimental impact on any advance in the US export sales pace.

Heavy rainfall will move across the center Midwest and northern Delta by the weekend which will halt any planting in the region.

The northern US Plains will see another dose of snowfall tonight and into the weekend with heavy rainfall in areas of KS, NE, and IA over the next 48 hours. Accumulation in the Dakotas and Minnesota following this event will total 20-30 inches for various local areas.

The heavy snowfall is likely to cause flooding in regions of the Red River Valley and some suggest corn planted acreage could be cut significantly in this region due to the late start of planting.

Temperatures are expected to warm up in the region by next week which will kick off the snow melt season. The US planting pace was reported at 2% complete compared with 16% last year. The market was looking for planting to come in near 6% complete.

May Rice finished up 0.165 at 15.605, equal to the high and equal to the low.

Soy Futures Closed Higher

May Soybeans finished up 16 1/2 at 1411 1/2, 5 1/2 off the high and 22 1/2 up from the low. July Soybeans closed up 19 1/4 at 1375 1/4. This was 24 3/4 up from the low and 2 1/2 off the high.

May Soymeal closed up 8 at 401.3. This was 9.3 up from the low and 2.4 off the high.

May Soybean Oil finished up 0.8 at 48.98, 0.13 off the high and 0.98 up from the low.

The soybean market saw support for most of the session, led mostly by the old crop contracts. Thoughts that additional export business may have been done, perhaps to Chinese buyers added support.

No confirmation has been made. A well-followed oilseed analyst suggested recently that the slow start to the South American export program due to shipment delays caused by inadequate infrastructure at the ports could mean China may buy more US soybeans in the next couple of weeks.

CIF and FOB values have been firm over the last week which suggests strong demand but also tight domestic supply pipelines.

The analyst also noted that the Chinese could increase purchases of rapeseed and canola, something recently done out of Australia.

Wires reported that China has approved an additional oilseed crush plant to accept shipments of Canadian canola. China agreed to allow Canadian canola to be processed in a 600,000-tonne oilseed crush plant.

The moves by the Chinese suggest they are looking at alternatives to soybeans due to the tight US supply and logistical problems in South America.

Soybean demand from China has been questionable since the beginning of 2013 due to sluggish poultry and pork prices. Long term, many traders suspect demand to increase as Chinese farmers' plant more corn and turn away from soybeans.

Wheat Futures Closed Higher

May Wheat finished up 9 3/4 at 703 1/2, 1/2 off the high and 13 3/4 up from the low. July Wheat closed up 8 1/2 at 707 3/4. This was 12 3/4 up from the low and 1/2 off the high.

Chicago and KC wheat traded higher on the day but failed to show the upside strength that was seen in the corn and soybean markets.

Physical commodities bounced today with gold trading to the upside after yesterday's sharp losses and crude oil rallied off its lows late in the session.

Freezing temperatures are expected to move through the western plains by the middle of this week which will put hard red winter wheat at risk of winterkill in northwest KS, eastern CO, and southwest NE.

Crop conditions continue to improve for most states where Chicago wheat is grown which is adding a bearish tilt to the new crop supply outlook although demand has been impressive given the recent sales to China.

The KS conditions were pegged at 30% G/E, down 1% from last week and OK were 25% G/E, down 3% from last week. KS wheat was 35% jointed vs. 89% last year and 47% on average.

The bear camp suggests that the wheat crop in areas of KS isn't far enough along in its growth stage compared to where the freezing temperatures are scheduled to occur which may limit the amount of damage.

Regardless, total production losses won't be able to be reconciled for another week or so. Weather conditions will trend warmer in areas of France and Germany into next week which will help wheat maturity and benefit soil moisture conditions.

May Oats closed up 6 1/4 at 374 3/4. This was 10 1/2 up from the low and 2 1/4 off the high.

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