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CME: Corn Finished Up Tuesday

07 August 2013

US - September Corn finished up 3 at 472 1/4, 3 1/4 off the high and 6 3/4 up from the low. December Corn closed down 1 1/4 at 459 1/4. This was 4 1/4 up from the low and 3 off the high.

Corn futures traded mixed to slightly lower for most of the session but end users were active on the dip which limited the downside of the market. The US Dollar traded down on the day, mostly against a stronger Japanese Yen. Farmers remain on the sideline with additional sales and ethanol bids in the west remain aggressive. 

The Sept/Dec was down sharply last week so some bargain buying may have taken place today which helped to push the spread higher. Weather leans negative for market direction with showers moving through eastern NE this morning and then shifted into localized regions of western and central IA this afternoon. The system is expected to move east, hopefully hitting areas of central and northern IL/IN.

A well-followed investment bank increased their 13/14 corn production and lowered their price forecast for corn to $4.25 vs. $4.75 previously. The bank issued a yield forecast of 161 bushels per acre, up from 156 previously. The US EPA released a statement that they would require blending of 16.55 billion gallons of biofuels into fuel supplies in 2013, unchanged from the previous proposal.

The statement suggested that they would propose adjustments to the 2014 volume requirements, including both the advanced biofuels and total renewable fuel categories. The EPA did say that they would reduce cellulosic biofuel usage from 14 million gallons to 6 million gallons. The EPA also stated that they realize the volume restraints associated with the blend-wall in 2013, which has supported the RIN market this year and they may provide additional time for parties to demonstrate compliance with the 2013 standards. The corn market reaction was steady after the release of the statement but traders noted weakness in the RIN market.

September Rice finished down 0.065 at 15.695, equal to the high and equal to the low.

Soybean

August Soybeans finished down 5 1/2 at 1324 1/4, 10 3/4 off the high and 6 up from the low. November Soybeans closed down 16 at 1167 1/4. This was 2 up from the low and 15 3/4 off the high.

August Soymeal closed down 6.6 at 396.0. This was 2.2 up from the low and 10.9 off the high.

August Soybean Oil finished down 0.61 at 42.11, 0.36 off the high and 0.14 up from the low.

The soybean market traded sharply lower on the day and the November contract made a new low for the move. Radar showed showers in eastern NE which were set to push into western and central IA later in the day. Additional showers stretched across central and southern MO with most of the moisture expected to push east into areas of the eastern Corn Belt. Basis was mixed in the Midwest midday with stronger bids showing up in processor markets.

The USDA reported this morning that US private exporters sold 110,000 tonnes of soybeans to China for the 2013/14 crop year but this failed to offer any support. The trade continues to be mindful of how far behind the maturity is for some of the crop across the Midwest but August weather is the ultimate determining factor when it comes to yield potential.

Crop condition ratings were considered bearish for direction but some private estimates still see the USDA lowering planted acreage or yield in the August 12th report. A media outlet released estimates from the trade that showed many see the 13/14 ending stocks dropping to 262 million bushels, down from 295 currently. World ending stocks were estimated at 74.39 million tonnes vs. the current estimate from the USDA at 74.12 million tonnes.

The US EPA released a statement that they would require blending of 16.55 billion gallons of biofuels into fuel supplies in 2013, unchanged from the previous proposal. The statement suggested that they would propose adjustments to the 2014 volume requirements, including both the advanced biofuels and total renewable fuel categories. The EPA did say that they would reduce cellulosic biofuel usage from 14 million gallons to 6 million gallons. The EPA also stated that they realize the volume restraints associated with the blend-wall in 2013, which has supported the RIN market this year and they may provide additional time for parties to demonstrate compliance with the 2013 standards. December soybean oil forged a new low for the move today.

Wheat

September Wheat finished up 5 1/4 at 650 1/2, 3/4 off the high and 8 1/4 up from the low. December Wheat closed up 5 at 662 3/4. This was 8 1/4 up from the low and 3/4 off the high.

Wheat futures edged higher today following the sharp losses seen yesterday. Wheat/corn spreads forged a tepid recovery to the upside but corn turned lower which helped to keep the upside limited in wheat. Egypt's GASC reportedly bought 120,000 tonnes of Ukraine and Romanian wheat for September 21-30 shipment.

Prices were between $250.50 and 251.35 per tonne. Russian wheat was offered at a premium to the booked cargos and there was no US offer on the tonnage. French wheat was close to working into Egypt which is likely due to softening cash markets in Europe as harvest ramps up across France and Germany. Jordan reportedly bought 100,000 tonnes of soft wheat on an optional origin basis as well. Some in the trade see a revision lower in the 13/14 world carryout in the USDA report on August 12th which might lend support to the market over time as funds hold a sizeable net short position.

A wire service released a poll midday that stated rain in the Black Sea could trim production forecasts in the region but combined, Russia, Ukraine, and Kazakhstan are still expected to increase production by 36% to 87 million tonnes and exports by 22% to 30 million tonnes. The USDA is estimating combined production at 88 million tonnes and exports at 32 million tonnes. Thoughts that world production in the northern hemisphere is topping out but demand is growing, mostly due to Brazil and China, are seen as supportive influences.

September Oats closed up 4 at 339 3/4. This was 3 1/4 up from the low and equal to the high.


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