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CME: Corn Futures Closed Lower Tuesday

01 May 2013

US - May Corn finished down 3/4 at 683 1/4, 9 3/4 off the high and 8 up from the low. July Corn closed down 9 3/4 at 650. This was 2 1/4 up from the low and 19 off the high.

The corn market traded mixed but mostly lower in today's session. Traders noted that the weaker trade in the July contract throughout most of the session relative to new crop corn was due to an unwind in the July/December calendar spread.

New crop corn contracts saw support due to a forecast that will likely shut down planting across the US by Friday.

A mix of rain and snow is expected to hit most of Iowa along with temperatures that dip down into the 30's for NE and IA. The system will shift to the east and hit IL and track to the south into the delta and southeast.

Planting was taking place in areas of NE and IA today but not at a rapid pace. Traders noted that the interior basis levels were steady to slightly weaker on better farmer sales although heavy volume was not indicated.

Ethanol margins remain strong which has kept plants aggressive with bids to shore up supply pipelines into May and June.

Despite the improving demand in the 2012/13 crop year, the market sentiment and focus remains on new crop planting conditions as traders and analysts weigh the impact of acreage lose and yield ramifications due to the planting delays.

July Rice finished up 0.185 at 15.105, equal to the high and 0.185 up from the low.

Soy Futures Closed Lower

May Soybeans finished down 4 at 1467 3/4, 21 off the high and 3 3/4 up from the low. July Soybeans closed down 9 3/4 at 1399. This was 3 1/2 up from the low and 24 3/4 off the high.

July Soymeal closed down 1.9 at 414.5. This was 1.4 up from the low and 8.2 off the high.

July Soybean Oil finished down 0.29 at 49.22, 0.47 off the high and 0.25 up from the low.

Interior basis levels remain extremely firm in the US despite the higher flat price levels with processors paying anywhere from 110-115 over the July contract.

The firm basis and steady crush pace continues to support old crop soybean contracts on pullbacks which occurred in today's session.

Thoughts that the next planting report will show 500,000-1 million more soybean acres planted, according to some market estimates, helped to keep pressure on the new crop soybean contract midday.

The US Corn Belt will see another round of heavy rainfall by this Friday that will span across NE, IA, IL, and then shift to the southeast which will keep planters sidelined. The cool and wet conditions have likely decreased corn acreage estimates in which case many will shift to soybeans.

A well-followed oilseed analyst reported overnight that they expect South American soybean exports to reach record levels in May as the bottleneck of vessels at the port slowly deteriorates and logistics run smoother.

The analyst estimates that up to 9.3 million tonnes will be shipped out of South America in April, which would be a record, and up from 4.3 million tonnes shipped in March. The analyst went on to say that 10 million tonnes may be shipped in the month of May.

Wheat Futures Closed Higher

May Wheat finished up 12 at 721 3/4, 5 3/4 off the high and 24 1/2 up from the low. July Wheat closed up 14 1/2 at 731. This was 26 up from the low and 5 3/4 off the high.

Chicago and Kansas City wheat traded sharply higher today with the Chicago May/July spread seeing some modest sell pressure due to new delivery receipts issued in Toledo, OH yesterday afternoon.

The wheat market climbed off session lows that were put in this morning with the help of a stronger corn market and due to a forecast that puts another round of freezing temperatures in western NE, eastern, CO, western KS, westerns OK, and north Texas by this Friday which may cause additional damage to the KC crop.

A well-followed crop tour is making their first stops of the day with yields in north-central KS coming in around 40-50 bushels per acre with occasional fields that are slightly higher.

Expectations are for yields and quality of the wheat to deteriorate as they move west towards Colby, KS where drought and potential freeze damage was more prevalent.

Traders are also beginning to monitor weather patterns in Russia as the Volga Valley continues to deal with drought conditions from last year.

The southern portion of the valley is considered a major growing region for the country and rain will be needed soon to avoid significant yield stress on winter grains.

July Oats closed up 1 at 391 3/4. This was 2 1/2 up from the low and 3 3/4 off the high.

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