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CME: Corn Futures Closed Lower Friday

02 December 2013

US - December Corn finished down 2 at 415 1/4, 4 1/4 off the high and 2 1/4 up from the low. March Corn closed down 2 at 424 1/2. This was 2 3/4 up from the low and 2 1/2 off the high.

March corn experienced active selling and pushed moderately lower on the session early but managed to recover into the close after moving down to the lowest level since November 18th.

Continued talk that production would need to be adjusted higher in future USDA reports helped to pressure.

There were no deliveries on first notice day for December futures. The International Grain Council raised their forecast for world corn production by 2 million tonnes to 950 million tonnes. Argentina corn plantings are thought to be near 44% complete and the weather outlook remains near ideal with dry weather for plantings followed by periods of good rainfall.

Weekly export sales came in at 1.007 million tonnes which was the high-end of trade expectations. Cumulative corn sales stand at 71.4% of the USDA forecast for 2013/2014 (current) marketing year versus a 5 year average of 50.4%.

Sales of just 250,000 tonnes are needed each week to reach the USDA forecast. On top of news of a cargo found with unapproved GMO corn in China, traders are also disappointed with China corn demand news.

China's Jan-Oct feed production totaled just 29.2 million tonnes, down 9.4% from last year's pace. Jan-Oct pig feed production was pegged at 9.99 million tonnes, down 6.2% from the previous years pace.

January Rice finished up 0.125 at 15.96, equal to the high and 0.16 up from the low.

Soy Futures Closed Higher

January Soybeans finished up 18 at 1338, 1 1/2 off the high and 11 up from the low. March Soybeans closed up 11 1/2 at 1317 3/4. This was 8 up from the low and 3 1/4 off the high.

December Soymeal closed up 11.1 at 457.0. This was 7.7 up from the low and 1.5 off the high.

December Soybean Oil finished up 0.22 at 40.22, 0.21 off the high and 0.17 up from the low.

January soybeans saw an impressive rally early led by stronger than expected export demand and held onto the gains to closed sharply higher on the day. However, the rally fell short of Wednesday's highs and the market ended with an inside trading session.

Weekly export sales for soybeans came in at 1.406 million tonnes for the current marketing year and 364,900 for the next marketing year for a total of 1.771 million tonnes which was much higher than expected. China was the largest old crop buyer of 992,900 tonnes for the week. As of November 21st, cumulative soybean sales stand at 93.5% of the USDA forecast for 2013/2014 (current) marketing year versus a 5 year average of 64.7%.

Sales of just 64,000 tonnes are needed each week to reach the USDA forecast. On top of the weekly sales, US exporters reported daily sales of 110,000 tonnes of US soybeans for the 2014/15 season. Meal sales came in at 307,900 tonnes for the week which was also well above trade expectations.

Cumulative soybean meal sales stand at 61.0% of the USDA forecast for 2013/2014 (current) marketing year versus a 5 year average of 43.9%. Sales of just 81,000 tonnes are needed each week to reach the USDA forecast. Oil sales came in at 18,800 metric tonnes which pushed cumulative soybean oil sales to 51.3% of the USDA forecast for 2013/2014 marketing year versus a 5 year average of 38.7%.

Sales of 6,000 metric tonnes are needed each week to reach the USDA forecast. Weather remains near ideal for South American crops as Argentina has periods of dry weather for planting and plenty of moisture in the longer-term forecast models. Brazil also looks favorable for a great start to the crop.

There were 1,371 contracts delivered against the December oil on first notice day. There were no meal deliveries. Eggs set and chicks placed for the latest weekly update were both up 2% from last year which suggests solid meal demand into the 1st quarter of next year.

Wheat Futures Closed Higher

December Wheat finished up 3 3/4 at 655, 2 off the high and 4 1/4 up from the low. March Wheat closed up 7 at 670 1/2. This was 5 1/2 up from the low and 1/4 off the high.

March wheat pushed sharply higher on the session early in the day led by cold weather concerns but the market was down 5 cents from the early highs into the mid-session but still 2 cents higher on the day.

The market managed to find some late in the day support from the move up in soybeans and a firm trade late in corn. March KC wheat closed well off of the early highs as traders see snow ahead of the cold weather next week as a bearish development. While it is expected to get cold enough next week to see winterkill damage, there is also snow in the forecast and any areas that have snow cover will be insulated from the cold.

There were 1,204 contracts delivered against the December wheat on first notice day. Weekly export sales came in at 562,200 tonnes which was a bit higher than expected. Cumulative wheat sales stand at 74.7% of the USDA forecast for 2013/2014 (current) marketing year versus a 5 year average of 63.6%.

Sales of 276,000 metric tonnes are needed each week to reach the USDA forecast. India state firms are offering another 370,000 tonnes of wheat for export in the Jan-February time frame.

Argentina's agriculture ministry raised their wheat production estimate by 300,000 tonnes to 8.5 million tonnes as compared with the current USDA estimate of 11 million.

December Oats closed up 7 1/2 at 365 1/4. This was 3 1/4 up from the low and 1 1/2 off the high.


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