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CME: Corn Futures Closed Lower Wednesday

02 May 2013

US - May Corn finished down 1 1/2 at 681 3/4, 4 1/2 off the high and 10 3/4 up from the low. July Corn closed down 3 1/4 at 646 3/4. This was 7 1/4 up from the low and 6 off the high.

Physical commodity markets had a negative tilt all day as speculative money positioned to start month and capital allocation made its way in and out of certain markets.

The early weakness was countervailed by a wintery weather system set to move through NE and IA by tomorrow along with significant showers for parts of IL and parts of the southeast and delta.

Today's ethanol production data for the week ending April 26th averaged 857,000 barrels per day, up 0.50% vs. last week and down 4.15% vs. last year. Total ethanol production for the week was 6 million barrels.

Corn used in last week's production is estimated at 90 million bushels, up from 89.6 the week prior. This crop year's cumulative corn used for ethanol production for this crop year is 2.9 billion bushels.

Corn use needs to average 90.96 million bushels per week to meet this crop year's USDA estimate of 4.55 billion bushels. Stocks as of April 26th were 17.04 million barrels, down from 17.6 the week prior and down 23.3% vs. last year.

Implied demand jumped to 6.56 million barrels from 6.16 the week prior. Ethanol margins continue to run at some of the best levels in years which have resulted in some plants across the Corn Belt beginning to start production up early after idling production in the first half of the crop year.

July Rice finished up 0.165 at 15.27, 0.01 off the high and 0.21 up from the low.

Soy Futures Closed Lower

May Soybeans finished down 30 1/4 at 1437 1/2, 28 3/4 off the high and 8 1/4 up from the low. July Soybeans closed down 26 at 1373. This was 7 1/2 up from the low and 25 off the high.

July Soymeal closed down 10.1 at 404.4. This was 0.9 up from the low and 11.0 off the high.

July Soybean Oil finished down 0.37 at 48.85, 0.4 off the high and 0.55 up from the low.

July and November soybeans were down sharply today on weak technical signals as well as negative world supply and demand developments.

The basis at a main port in Brazil dropped sharply lower yesterday and the discount between the US and Brazil continues to widen which suggests the US may be able to import soybeans at some point if vessel availability is not a problem.

No confirmation of any trades has been made but traders continue to watch for this type of market development. Some traders suggested that export sales cancellations might be around the corner for the US after old vs. new crop spreads collapsed today.

The November contract saw pressure due to the sharply lower trade in the old crop market and on expectations for increased planted acreage in the 2013/14 crop year. US crush demand remains a positive feature in the market as well as explosive basis levels in the US Midwest.

Outside markets were mostly negative with crude oil, copper, and US equities trading lower which added momentum to the downside for the agricultural commodity markets.

Wheat Futures Closed Lower

May Wheat finished down 11 1/4 at 710 1/2, 11 3/4 off the high and 5 1/2 up from the low. July Wheat closed down 10 at 721. This was 7 3/4 up from the low and 11 1/4 off the high.

Chicago and Kansas City wheat traded lower at the opening bell but managed to climb off session lows midday due to adverse weather conditions in the west and a potential freeze threat in the east by May 10th.

The lower trade to start the day looked to be positioning to start the month of May which suggests the sharply higher trade on Tuesday was mostly short covering to end the month of April.

Cooler than normal conditions continue to be a threat to the wheat crop in the west with mid to high 20's expected for areas of NE, KS, and OK which could add additional damage to the already beaten up crop.

The KS Crop tour scouted fields in western KS today with yield prospects reportedly expected to be down significantly from year ago levels.

The highest yield estimate came in at 25.7 bushels per acre, as of this typing, and the lowest was zero. Scouts suggested many fields would likely be zeroed out by insurance adjusters.

Southwest KS remains the worst area of the state as it continues to be short changed on moisture. The tour has noted several times however that many areas in KS can see improvement in yield if May and June rainfall occurs.

July Oats closed down 11 1/2 at 380 1/4. This was 2 3/4 up from the low and 14 1/4 off the high.

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