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CME: Corn Futures Closed Higher Thursday

30 August 2013

US - December Corn finished up 3/4 at 481 1/2, 2 1/4 off the high and 4 1/2 up from the low. March Corn closed up 3/4 at 494 1/4. This was 4 1/4 up from the low and 4 3/4 off the high.

Weather forecasts lean mixed ahead of the weekend with mostly warm and dry conditions today and tomorrow with a chance for showers in the northern and eastern Corn Belt over the weekend.

Accumulation is only expected to be a quarter inch to an inch. Temperatures will back off early next week, limiting stress on crops. Traders report that harvest is moving forward in southeastern Arkansas with big yields being reported.

Cash markets remain firm in the western Corn Belt but there were some rumors that bids in Central IL were softening as harvest inches north. Export sales data provided little direction this morning as traders focus in on the weather.

Futures drifted lower this morning and the December contract probed the open, downside gap from Sunday night.

The new crop contract filled half of the gap but then reversed higher which added some bullish momentum to the upside late in the day.

Net weekly export sales showed a cancelation of 15,000 tonnes for the current marketing year, 673,800 for the next marketing year and as of August 22nd, cumulative sales stand at 36% of the USDA forecast for 2013/2014 versus a 5 year average of 25%.

Sales of 371,000 tonnes are needed each week to reach the USDA forecast. Mexico and Japan were noted buyers in the last week.

Weekly jobless claims came in better than expected this morning which helped to push the US Dollar higher and this may have lent some overhead pressure to physical commodity markets.

November Rice finished up 0.02 at 15.73, equal to the high and 0.03 up from the low.

Soy Futures Closed Lower

November Soybeans finished down 4 1/4 at 1368 1/2, 14 1/4 off the high and 8 up from the low. January Soybeans closed down 3 3/4 at 1364 3/4. This was 7 3/4 up from the low and 14 off the high.

December Soymeal closed up 0.8 at 430.1. This was 2.7 up from the low and 7.1 off the high.

December Soybean Oil finished down 0.58 at 44.2, 0.7 off the high and 0.42 up from the low.

The soybean market charged to the upside early in the day but saw pressure late in the session which closed the November contract in negative territory.

Traders were cautious ahead of the weekend with forecasts showing a quarter inch to one inch for the far northern regions of the Corn Belt and some areas of the eastern Corn Belt. IA, MO, and most of IL look dry.

Reports from the country suggest yields are heading backwards in many key production acres and without rain over the next 7-10 days, further losses will be seen. Export sales were supportive with another good round of volume reported for the new crop year.

Traders were mostly focused on the weather and positioning ahead of the weekend. The Sept/Nov spread edged higher with active bull spreading ahead of first notice day for the Sept contract.

Net weekly export sales for soybeans showed a cancelation of 3,200 tonnes for the current marketing year, 868,700 tonnes of 2013/14 and as of August 22nd, cumulative sales stand at 52% of the USDA forecast for 2013/2014 vs. the 5 year average of 33%.

Sales of 336,000 tonnes are needed each week to reach the USDA forecast. Net meal sales came in 162,100 for the new crop year and cumulative sales for the old crop year continue to be over 100% of the current USDA forecast.

Net oil sales came in at 6,700 tonnes for the current marketing year and 17,900 for the next marketing year for a total of 24,600. Cumulative sales stand at 93% of the USDA forecast for 2012/2013 versus a 5 year average of 92%. Sales of 12,000 tonnes are needed each week to reach the USDA forecast.

Wheat Futures Closed Lower

December Wheat finished down 5 1/4 at 654 1/4, 9 1/2 off the high and 2 1/4 up from the low. March Wheat closed down 5 3/4 at 665 3/4. This was 2 1/4 up from the low and 9 1/4 off the high.

Wheat futures traded lower on the day and saw pressure from technical selling and on thoughts US wheat export sales may trend lower given the premium the US holds to the rest of the world.

Export sales failed to inspire any positive action as bulls were looking for acceleration in total sales week over week.

The weekly volume is certainly supportive to the fact that the USDA may be underestimating export demand but the US sales pace could slow in Q1 2014 as the southern hemisphere new crop comes to the world market.

Net weekly export sales came in at 551,300 tonnes for the current marketing year and as of August 22nd; cumulative sales stand at 51% of the USDA forecast for 2013/2014 versus a 5 year average of 41%. Sales of 366,000 tonnes are needed each week to reach the USDA forecast.

Sales for 13/14 were up 12% from the previous week but down 4% from the 4 week average. Mexico, Japan, Indonesia, and Brazil were all noted buyers. KC sales were impressive again at 235,000 tonnes and at the same time Chicago sales were once again disappointing at only 48,000 tonnes.

There were reports of additional cargos sold to Brazil this week and many see Brazil's import tax waiver being extended to entice additional sales.

Simply put, without China, the US Chicago sales book will struggle given the premium US wheat holds over French and the Black Sea.

The EU cleared 687,000 tonnes of soft wheat for export this week, taking the marketing year total to 3.9 million tonnes as compared to 1.8 million in the same period a year ago. Jordon issued an export tender midday which will likely be sold on an optional origin basis.

December Oats closed down 1 at 347 1/2. This was 2 1/2 up from the low and 2 off the high.


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