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CME: Corn Futures Closed Down Wednesday

13 June 2013

US - July Corn finished down 8 3/4 at 650 3/4, 11 1/4 off the high and 4 1/2 up from the low. December Corn closed down 13 1/4 at 537 1/2. This was 5 1/4 up from the low and 13 3/4 off the high.

The corn market traded lower on the day with losses to the downside led by the December contract. The USDA report was considered bearish for market direction after US ending stocks for 2013/14 were pegged at 1.949 billion bushels, down slightly from 2.004 billion in May and up from trader estimates of 1.795 billion. Planted acreage was left unchanged at 97.3 million acres and instead the USDA adjusted the national yield down to 156.5 bushels per acre as compared with 158 in May. Total production was estimated at 14.005 billion bushels. The 2012/13 ending stocks were estimated at 769 million bushels as compared with the May estimate of 759 million. World ending stocks came in 151.83 million tonnes for the 2013/14 marketing year, down slightly the May estimate of 154.63 million.

Brazil production held steady at 72 million tonnes from May and Argentina production was unchanged at 27 million. World production fell to 962.58 million tonnes vs. the May estimate of 965.94. Today's ethanol production report helped to lift July corn off it's session lows and bull spreading was active throughout the day.

Ethanol production for the week ending June 7th averaged 884,000 barrels per day, down slightly from the week prior and down 3.9% vs. last year. Corn used in last week's production is estimated at 92.8 million bushels, down modestly from last week. This crop year's cumulative corn used for ethanol production is 3.45 billion bushels. Corn use needs to average 94.9 million bushels per week to meet this crop year's USDA estimate of 4.6 billion bushels.

Stocks as of June 7th were estimated at 16 million barrels, down 2.6% vs. last week and down 22.6% vs. last year. This is the lowest stocks level since late 2009. Seasonal trends suggest stocks normally decline from May into November. There were no reported imports last week and implied demand jumped to 6.06 million barrels, up from 5.83 the week prior.

July Rice finished up 0.145 at 16.285, equal to the high and 0.15 up from the low.

Soybean

July Soybeans finished up 1/4 at 1540 3/4, 18 off the high and 10 1/4 up from the low. November Soybeans closed down 12 3/4 at 1314 1/4. This was 15 1/4 up from the low and 16 1/4 off the high.

July Soymeal closed down 2 at 461.4. This was 2.3 up from the low and 8.5 off the high.

July Soybean Oil finished up 0.07 at 48.11, 0.19 off the high and 0.09 up from the low.

November soybeans traded down sharply today while the July contract spent time at both sides of the unchanged level. The USDA report was considered neutral against trade expectations after the USDA pegged the 2013/14 ending stocks at 265 million bushels which was unchanged from the May estimate, and down slightly from trade estimates at 268 million. With negative news for corn and wheat and a lack of yield adjustment in soybeans due to late planted crops, the market pushed a bit lower after the release.

The 2012/13 carryout came in unchanged from last month at 125 million bushels. Crush and export numbers were left unchanged. Planted acreage was estimated at 77.1 million acres and yield at 44.5 bushels per acre to leave a production forecast of 3.390 billion bushels. Many traders believed the yield would be adjusted lower.

World ending stocks for 2013/14 were estimated at 73.69 million as compared to 74.96 million tonnes in May and against trader estimates near 73.5 million. China import demand was left at 69 million tonnes as compared with 59 million for the 2012/13 season. The bulls were disappointed that the USDA failed to lower yield but this was offset by the lack of an adjustment higher for acreage.

Wheat

July Wheat finished down 13 3/4 at 683, 13 3/4 off the high and 4 up from the low. December Wheat closed down 14 1/4 at 705 1/4. This was 4 up from the low and 13 1/4 off the high.

Wheat futures traded sharply lower on the day following the USDA report which was considered slightly bearish against trader estimates. The 2013/14 US all wheat carryout was pegged at 659 million bushels, down from the May estimate of 670 million and compared to trader estimates calling for a revision down to 640 million. US all wheat production for 2013/14 was estimated at 2.080 billion bushels, up slightly from the May forecast of 2.057 billion and above the market estimate of 2.037.

Global ending stocks for the 2013/14 season came in at 181 million tonnes, as compared with trader estimates of 185.14 and down from May estimate of 186.38. The cut to world ending stocks was much larger than many expected which may provide some short term support. US wheat remains a stiff premium to other major exporters in the world with favorable weather conditions over the next 2 weeks which should help improve crop conditions in the northern hemisphere. The technical charts have a bearish tilt and world supply remains abundant.

July Oats closed unchanged at 403 1/4. This was 5 3/4 up from the low and 1 3/4 off the high.


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