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CME: Corn Futures Closed Lower Thursday

13 December 2013

US - March Corn finished down 5 at 434 1/4, 4 3/4 off the high and 6 1/4 up from the low. May Corn closed down 5 1/4 at 442 1/2. This was 6 1/4 up from the low and 5 off the high.

Funds were active fellers today and the market selling peaked into the mid-day. March corn closed 5 cents lower on the day but managed to bounce up 6 1/4 cents from the mid-session lows.

Fears that the Senate will eliminate the corn ethanol mandate, fears that China will continue to turn away US corn due to GMO issues and fears that higher China production forecasts will drive up global ending stocks were all factors to help drive futures lower in spite of solid demand news this week.

Corn is down sharply today as burdensome supply in the US and good weather in South America sparked more selling today in spite of strong export sales news and the biggest weekly ethanol usage in nearly two years.

March corn was trading 6 1/4 cents lower on the day into the mid-session but the market has been able to hold above the December 10th lows so far.

Weekly export sales came in at 695,400 metric tonnes for the current marketing year and 109,400 for the next marketing year for a total of 804,800.

As of December 5th, cumulative corn sales stand at 72.5% of the USDA forecast for 2013/2014 (current) marketing year versus a 5 year average of 53.4%. Sales of 263,000 tonnes are needed each week to reach the USDA forecast.

On top of the weekly update, private exporters reported a sale of 120,000 tonnes of US corn to unknown destination.

This is the second day in a row for the same amount to unknown destinations and both of these sales will show up in next week's update.

Adding to the bearish tone today was news from the China National Grains and Oils Information Center that China production was revised higher to 217.7 million tonnes, up 6.7 million from the USDA estimate from Tuesday.

World ending stocks were pegged at 162.46 million tonnes this week which is already a 13 year high. A group of 10 senators introduced a bill Thursday to eliminate the corn ethanol mandate.

While it appears that the bill may not pass, the bill illustrates the public tone toward the industry and suggests that the EPA proposal to lower than mandate is more of a done deal.

January Rice finished down 0.015 at 15.46, 0.02 off the high and equal to the low.

Soy Futures Closed Lower

January Soybeans finished down 20 1/4 at 1323 3/4, 23 1/4 off the high and 5 1/4 up from the low. March Soybeans closed down 17 at 1311 1/2. This was 5 1/2 up from the low and 19 1/2 off the high.

January Soymeal closed down 8.8 at 430.1. This was 1.1 up from the low and 10.1 off the high.

January Soybean Oil finished down 0.41 at 39.99, 0.5 off the high and 0.23 up from the low.

Fund and speculative selling more than offset strong demand to drive March soybeans down 17 cents on the day into the close.

Sellers are active and some traders feel that demand news is peaking this week and that the USDA significantly underestimated South America production in the report Tuesday. A few more bird flu cases reported in China elevated thoughts that China would cancel 1-2 million tonnes of US soybeans "once" China is convinced that the South America crops are good.

Strong demand continues and a general sense that demand will get no better and that supply is on the rise helped drive speculative longs out of the market and the move below Tuesday's (USDA report day) lows added to the bearish tone.

The market collapsed to trade sharply lower on the day into the mid-session and down to the lowest level since December 6th for March soybeans. March meal closed down $6.80 and March soybean oil pushed down to the lowest level since October 3rd. Palm was down for the third day in a row.

Export demand news continues to come in much better than expected but a massive increase in supply suspected for 2014 remains as the primary bearish force.

Weekly export sales for soybeans came in at 1.108 million tonnes for the current marketing year and 413,900 tonnes for the next marketing year for a total of 1.522 million which was near twice trade expectations.

As of December 5th, cumulative soybean sales stand at 96.4% of the USDA forecast for 2013/2014 (current) marketing year versus a 5 year average of 69.3%. Sales of just 37,000 tonnes are needed each week to reach the USDA forecast. Meal sales came in about as expected at 82,700 tonnes.

Cumulative meal sales stand at 61.6% of the USDA forecast versus a 5 year average of 47.6%. Sales of 85,000 tonnes are needed each week to reach the USDA forecast.

Oil sales were 2,300 tonnes. Strong demand news has not been enough to offset a developing long liquidation selling trend from speculators.

Wheat Futures Closed Lower

March Wheat finished down 7 at 633 3/4, 9 off the high and 3 1/2 up from the low. July Wheat closed down 4 1/4 at 642 1/4. This was 3 1/2 up from the low and 6 off the high.

March wheat closed down 7 cents on the session and posted new contract lows. Sluggish export sales news and weakness in the other grains helped to pressure and news that India is getting more active on the world market added to the bearish tone.

Just when traders thought the US might have better luck at tenders which have been dominated by European and Black Sea wheat, the low price of the India tender sale this week helped to pressure.

India plans to move near 2 million tonnes on the world market in the next two months. December KC wheat closed 27 1/4 cents lower on the day. March Paris wheat was down 0.6% and near a 3-week low which added to the bearish tone.

Weekly export sales came in at just 372,200 tonnes which was nearer the low end of the range and there were also 10,700 tonnes sold for the next marketing year for a total of 382,900 tonnes.

As of December 5th, cumulative wheat sales stand at 76.7% of the USDA forecast for 2013/2014 (current) marketing year versus a 5 year average of 66.4%. Sales of 274,000 metric tonnes are needed each week to reach the USDA forecast.

The European Union granted export licenses for the week at 780,000 tonnes and this pushed cumulative sales since the start of the season to 12.55 million tonnes as compared with 8.6 million last year by this date.

Kansas City was into contract lows again today and March Minneapolis wheat closed down 4 1/2 cents and also into new contract lows.

March Oats closed up 6 3/4 at 351 3/4. This was 6 up from the low and 1 1/4 off the high.


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