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CME: Corn Futures Closed Higher Tuesday

04 January 2012

US - March Corn finished up 12 at 658 1/2, 5 3/4 off the high and 5 1/2 up from the low. May Corn closed up 12 1/4 at 667. This was 5 1/4 up from the low and 5 1/2 off the high.

March corn gapped sharply higher on the session and closed 12 higher on the session but near the middle of the day's range. A bullish tilt to outside market forces plus continued dry weather concerns for Argentina helped to drive the market sharply higher early in the session.

A sharp drop in the US dollar plus a surge higher in gold and crude oil plus sharply higher equity values in China and the US helped to drive the market higher this morning and to the highest level since November 10th. Some profit-taking selling after the recent surge higher plus the tendency for producers to move more cash corn on the market early in the year were seen as limiting forces for the upside.

In addition, traders see index funds as sellers for the first week of the year in order to rebalance their position for the coming season may haved also limited the advance. Weekly export inspections came in at just 24.6 million bushels which was well below trade expectations.

Shipments need to average 29.8 million bushels per week to reach the USDA forecast for the season. March Rice finished down 0.22 at 14.645, 0.495 off the high and equal to the low.

Wheat Futures Closed Higher

March Wheat finished up 4 1/4 at 657, 13 3/4 off the high and 3 1/4 up from the low. July Wheat closed up 5 1/2 at 691 3/4. This was 3 1/2 up from the low and 11 off the high. March wheat posted the highs of the day early in the session at 670 3/4 and closed a bit higher on the day but near 657.

The market gave back all of the early gains before seeing a late bounce. Talk of improving weather in the plains helped spark selling and a lower close on the day for Kansas City wheat after an early rally to the highest level since November 9th.

The mostly hot and dry forecast for Argentina over the next few weeks plus bullish outside market forces helped to support the sharp rally early in the session today. Weekly export inspections came in near trade expectations at 13.359 million bushels.

Shipments need to average 15.15 million bushels per week to reach the USDA forecast for the season. Wheat specific news was slow and a lack of selling interest helped to support the market early but the market set back well off of the early highs into the close. March Oats closed down 11 at 298 1/2. This was 1 1/2 up from the low and 18 1/2 off the high.

Soybean Futures Closed Higher

March Soybeans finished up 19 3/4 at 1227 1/2, 17 1/4 off the high and 4 1/4 up from the low. May Soybeans closed up 19 3/4 at 1237 1/4. This was 4 up from the low and 16 1/2 off the high. March Soymeal closed up 6.1 at 319.2. This was 3.6 up from the low and 2.1 off the high.

March Soybean Oil finished up 0.69 at 53.11, 0.68 off the high and 0.21 up from the low. March soybeans closed 19 3/4 cents higher on the session but down 17 1/4 cents off of the early highs.

Talk of profit-taking selling from speculators, increased selling from US producers due to the new tax year and ideas that the market is overbought after a rally of more than $1.40 in just 12 days helped to spark the sell-off off of the early highs.

The market continued to build a weather premium for South America dryness today as a surge higher in outside market forces added to the dry Argentina forecast for much of the next two weeks.

A sharp drop in the US dollar, bullish economic news for China and a jump in gold and energy markets added to the bullish tone early in the session to push the market to the highest level since October 28th.

Weekly export inspections came in at the high end of trade expectations at 34.056 million bushels. Shipments need to average 20.8 million bushels per week to reach the USDA forecast for the season.


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