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CME: Corn Futures Closed Lower Tuesday

11 December 2013

US - March Corn finished down 2 at 436, 4 3/4 off the high and 5 1/4 up from the low. May Corn closed down 2 at 444 1/2. This was 5 1/2 up from the low and 4 1/2 off the high.

March corn closed 2 cents lower on the session with a 10 cent range. The USDA report news was slightly supportive but the trade focus quickly shifted to weakness in wheat, uncertainty over demand to China and ideas that there could be a 200-400 million bushel increase in production for the January USDA update which will more than offset the 100 million bushel boost in demand from today's update. The USDA report was considered slightly bullish against trade expectations.

Ending stocks came in at 1.792 billion bushels as compared with the November estimate of 1.887 billion and 79 million bushels below the average trade estimate.

Exports were revised higher by 50 million bushels while ethanol usage was also revised higher by 50 million to 4.95 billion bushels. With a record Canadian corn crop, imports were revised higher by 5 million.

The USDA pegged world ending stocks for 2013/14 at 162.46 million tonnes as compared to 164.33 million in November and trade expectations at 163.3 million tonnes. The report numbers were supportive but not enough of a surprise to spark new buying.

January Rice finished up 0.05 at 15.56, equal to the high and 0.06 up from the low.

Soy Futures Closed Lower

January Soybeans finished down 5 1/2 at 1338 1/4, 15 1/4 off the high and 7 3/4 up from the low. March Soybeans closed down 4 3/4 at 1322. This was 8 up from the low and 13 off the high.

January Soymeal closed down 0.4 at 438.3. This was 3.3 up from the low and 6.1 off the high.

January Soybean Oil finished down 0.11 at 40.11, 0.44 off the high and 0.28 up from the low.

The market traded up to the highest level since September 19th before closing moderately lower on the day with March soybeans down 4 3/4 cents on the close. The market saw a 21 cent range right near the USDA report release.

The USDA report was considered neutral against trade expectations but weakness in wheat, a shift in focus to South American crop weather and long liquidation from speculators seemed to take over as main forces.

March meal challenged the September high before closing lower. The USDA pegged the 2013/14 ending stocks at 150 million bushels as compared with the November estimate of 170 million bushels and the average trade estimate at 153 million bushels.

Export demand was revised higher by 25 million bushels and crush was up by 5 million but imports were revised higher by 10 million bushels. Soybean oil ending stocks jumped to 1.690 billion pounds, up 55 million from last month.

January oil closed slightly lower on the session and pushed down to the lowest level since October 3rd. The USDA pegged world ending stocks for 2013/14 at 70.62 million tonnes as compared to 70.23 million in November and trade expectations at 71.65 million tonnes.

Brazil production was unchanged and Argentina production was revised up by 1 million tonnes to 54.5 million which was less than expected.

The report news is neutral against expectations and the market focus quickly shifted to expectations for a revision higher in US production for the January report and excellent South America weather which would suggest revisions higher in both Argentina and Brazil soybeans for the January report.

Wheat Futures Closed Lower

March Wheat finished down 11 3/4 at 638 3/4, 13 3/4 off the high and 3 3/4 up from the low. July Wheat closed down 10 3/4 at 642 1/4. This was 1 1/2 up from the low and 11 1/2 off the high.

March wheat closed sharply lower on the session and pushed down into new contract lows following the bearish news from the USDA report. The market is now down as much as 39 3/4 cents off of last week's highs.

The USDA report for wheat was considered bearish against trader expectations. US wheat ending stocks were pegged at 575 million bushels which is up from 565 million bushels in November and compares with the average trade estimate of 540 million bushels.

Traders expected a jump in exports but exports were left unchanged and imports were revised higher by 10 million bushels due to the big crop just north of the boarder.

Hard red spring wheat ending stocks were revised up by 10 million bushels to 202 million bushels while other classes were left unchanged. The projected season-average farm price for the 2013/14 season was lowered by 10 cents to $6.65 to $7.15.

World ending stocks came in at 182.78 million tonnes as compared with 178.48 million tonnes from the November report and up 3.68 million tonnes above the average trade estimate for the report.

Total wheat supply was raised 5.3 million tonnes to 887.3 million tonnes which is up 32.1 million tonnes from last year. Kansas City and Minneapolis wheat also drove into new contract lows and Minneapolis March wheat is now down as much as 49 1/4 cents from last week's highs.


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