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CME: Corn Futures Closed Lower Monday

07 May 2013

US - May Corn finished down 20 3/4 at 678 3/4, 10 1/4 off the high and 3 1/4 up from the low. July Corn closed down 24 3/4 at 636 1/2. This was 3 1/4 up from the low and 15 1/2 off the high.

A rough overnight session for the corn market carried into day trading hours after weather forecasts hinted at a more favorable outlook for corn planting across the Corn Belt.

The USDA will release their updated planting progress report today with the trade look for 15 per cent complete as of May 5th, making this year's pace the slowest since 1984. The pace as of April 28th was pegged at 5 per cent which matched the 1984 crop year.

Sources indicated that significant progress has been made in IA, NE, IL, and OH since early last week. Weekly inspection data disappointed with only 6.5 million bushels shipped as compared with 11.6 last week and well below the 19.3 million needed per week to hit the USDA estimate.

The cumulative shipment pace is listed at 59 per cent of the USDA export estimate vs. the 5 year average of 65 per cent .

The data suggests the USDA may be inclined to reduce the USDA export estimate from 800 million bushels, the lowest estimate since 1971-72.

Thoughts that there might be a small window of opportunity for the US to export in June and July could be supportive but many major world buyers have already covered tonnage out to June.

A robust supply outlook for Brazil may countervail the tight supply outlook in early summer if demand begins to build again.

July Rice finished up 0.155 at 15.51, equal to the high and 0.26 up from the low.

Soy Futures Closed Lower

May Soybeans finished down 10 1/2 at 1444 1/2, 24 1/2 off the high and 2 1/2 up from the low. July Soybeans closed down 18 at 1369 1/4. This was 3 up from the low and 25 3/4 off the high.

July Soymeal closed down 5.3 at 401.2. This was 1.0 up from the low and 8.0 off the high.

July Soybean Oil finished down 0.51 at 48.76, 0.97 off the high and 0.15 up from the low.

The soybean market traded sharply lower on the day and the May contract continued gaining on the July as tight interior supplies and lack of deliveries underpin the supportive tone.

Crush demand has simply not backed off enough given the tight 2012/13 carryout and farmers remain busy in the fields planting corn with very little interest selling soybeans at current cash levels.

The July/November spread took a step back today as traders took profits and on rumors that South American supplies may be close to working into US east coast ports. The USDA will release the first planting progress report today with the market looking for 4 per cent complete.

Export inspections were mildly supportive but the market continues to pay more attention to weather and new crop supply potential.

Shipments for the week ending May 2nd came in at 6.4 million bushels, down from 8.9 the week prior but above the 5.3 million needed each week to reach the USDA estimate. The cumulative shipment pace is sitting at 93 per cent of the USDA export estimate as compared with the 5 year average of 84.5 per cent.

Wheat Futures Closed Lower

May Wheat finished down 18 1/4 at 693, 10 1/2 off the high and 2 1/4 up from the low. July Wheat closed down 18 1/4 at 702 3/4. This was 2 1/4 up from the low and 12 1/4 off the high.

Chicago and Kansas City wheat traded sharply lower on the day, mostly on the heels of a weaker corn market as the weather forecasts look more favorable for corn planting into May 15th. Temperatures look like they'll warm up in areas of the western plains this week with a chance for showers mid-week.

The mixture of warmer temperatures and better rainfall, if it transpires, should help crops that are caught in between "poor" and "average" conditions. The overnight action will likely trade off the results of the wheat crop conditions report.

Export inspections came in below market estimates at 16.6 million bushels, down from 30.8 million last week and below the 24.7 million needed per week to reach the USDA export estimate. The cumulative shipment pace is sitting at 90 per cent of the USDA estimate as compared with the 5 year average of 89 per cent with only 4 weeks left in the marketing year.

New crop harvest is beginning to start up in areas of the Middle East and North Africa which could mean global demand backs off as buyers cover usage with fresh domestic supplies. Furthermore, if the Black Sea reenters the global market with aggressive offers, it may be difficult for the US to penetrate new markets.

July Oats closed down 9 at 379. This was 2 3/4 up from the low and 7 1/4 off the high.


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