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CME: Corn Futures Closed Higher Monday

18 June 2013

US - July Corn finished up 13 1/2 at 668 1/2, 3 1/2 off the high and 17 up from the low. December Corn closed up 5 1/2 at 538 1/2. This was 12 3/4 up from the low and 3 off the high.

The corn market traded sharply higher on the day, led by substantial gains for the July contract. Strong basis values are trading in the interior and export markets which have added support to the old vs. new crop calendar spreads.

Farmers in Argentina are going on a corn sales strike which has some in the market nervous that shipments of corn will be delayed which could move demand back to the US border. Local traders indicate that the flow of grain trucks entering Argentina's main port fell sharply today due to the slow sales pace.

Grain trucks entering the port were estimated at 553 today, down from 3,561 last Monday. Inspections were positive for market direction as well after shipments for the week ending June 13th came in at 14.2 million bushels, up from 6.4 million a week ago and the data surpassed the 12.2 million bushels needed each week to hit the new USDA export estimate.

Cumulative shipments are estimated at 80% of the USDA forecast as compared with the 5 year average pace of 76%. Profitable margins from the ethanol and livestock sector along with some nearby export demand helped to support the old crop market today.

July Rice finished down 0.18 at 16.325, 0.215 off the high and 0.125 up from the low.

Soy Futures Closed Lower

July Soybeans finished down 4 at 1512 1/2, 7 off the high and 22 1/2 up from the low. November Soybeans closed down 12 3/4 at 1285 1/2. This was 8 up from the low and 7 1/2 off the high.

July Soymeal closed down 1.6 at 449.1. This was 3.1 up from the low and 4.4 off the high.

July Soybean Oil finished up 0.36 at 48.84, 0.1 off the high and 0.74 up from the low.

Soybean futures ended the day mixed but most of the complex finished in the red, led by losses in the November contract. Long position holders took profits ahead of this afternoons planting progress and condition report.

Planting progress is expected to come in between 87-90% today, up from 71% a week ago. Traders noted that improved weather conditions over the last week for the central and southern Midwest helped move the pace along.

The first conditions ratings will be released this afternoon with many looking for good/excellent conditions to come in near 60-65% as compared with 65% last year. Slow farmer sales in Argentina and Brazil are keeping a bit of front end support in the market but processors in the region suggest they have supply coverage the next 2-3 weeks.

Export inspections were slightly bearish to market direction although shipments have been slowing for many weeks so this was no surprise to many. Shipments for the week ending June 13th came in at 2.8 million bushels, down from 3 million a week ago and below the 5 million needed each week to hit the USDA export estimate.

The cumulative shipment pace is at 96% of the USDA forecast as compared with the 5 year average pace of 89%. NOPA crush was supportive and helped support the July/November spread midday.

Crush for May was estimated at 122.6 million bushels, up from 120.1 million in April and this beat market estimates of 118.1 million. Soybean oil stocks fell sharply to 2.469 billion pounds as compared with 2.638 billion in April and against trader estimates of 2.547 billion. Stocks are still above year ago levels of 2.312 billion.

Wheat Futures Closed Lower

July Wheat finished down 1/4 at 680 1/2, 8 3/4 off the high and 6 up from the low. December Wheat closed down 1/2 at 701. This was 6 up from the low and 7 3/4 off the high.

Wheat futures traded mixed on the day but mostly higher. Delays to harvest in OK and southern KS as well as strong feed wheat demand in the western plains helped to support.

Trend-following funds increased their net short position in the KC wheat market last week so a moderate amount of short covering may have helped support the action. Harvest is expected to improve in the east this week.

Minor delays in the southeast/delta region may be seen due to rainfall. Yields in Arkansas are coming in above normal levels according to some sources in the market. South Korea is tendering for 140,000 tonnes of feed wheat so traders will watch for the results.

Paris wheat futures traded down as temperatures in France and Germany heat up this week and a rising Euro added overhead pressure. Crop conditions are likely to improve with the warmer temperatures.

The market continues to be mindful that China may be in the market for more Chicago wheat but no sales confirmations have been made.

Export inspections were supportive to market direction and came in at 21.6 million bushels, down from 24.4 million a week ago and above the 18.5 million needed on a weekly basis to reach the USDA export estimate. Cumulative shipments are at 4.5% of the USDA forecast as compared with the 5 year average pace of 4%.

July Oats closed down 3 at 396 1/2. This was 4 1/4 up from the low and 3 off the high.

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