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CME: Corn Futures Closed Mostly Unchanged Wednesday

12 January 2012

US - March corn managed to close mostly steady on the session and well up from the lows.

March Corn finished down 1/2 at 651 1/2, 4 off the high and 5 1/2 up from the low. May Corn closed down 1 at 658 1/4. This was 5 up from the low and 4 1/4 off the high.

Ideas that the heavier than expected rains will help soybeans and not corn as much plus some buying ahead of an the USDA reports which are expected to provide positive data helped to support the strong recovery.

More rain for a wider area than expected for Argentina in the last 24 hours helped to spark the selling pressures early today. In addition, traders noted increased long liquidation selling ahead of the key USDA stocks, production and supply/demand reports for release before the opening tomorrow.

A strong gain for the US dollar and weakness in energy markets added to the negative tone. South Korea bought 118,000 tonnes of corn, 55,000 tonnes of feed wheat and 55,000 tonnes of meal for April and May delivery.

Ethanol production for the week ending January 6th averaged 944,000 barrels per day. This is down 1.9% vs. last week and up 6.3% vs. last year. Total Ethanol production for the week was 6.608 million barrels.

Corn used in last week's production is estimated at 100.5 million bushels as compared with 95.2 million bushels necessary each week to reach the USDA projection for the marketing year. Stocks were 18.77 million barrels. This is up 4.6% vs. last week and up 9.8% vs. last year.

Cash basis levels remain firm with central Illinois corn bid at 18 cents over the board and this was also seen as a sign of tightening supply ahead.

Weekly export sales, for release in the morning, are expected to come in near 475,000 tonnes as compared with 306,000 last week.

Wheat Futures Closed Slightly Higher

March Wheat finished up 1 1/4 at 641, 3 off the high and 8 3/4 up from the low. July Wheat closed up 2 1/2 at 678. This was 9 1/2 up from the low and 3 off the high.

March wheat closed slightly higher on the day after choppy and two-sided trade. A sell-off in the euro currency plus weakness in the other grains helped to pressure wheat early in the session today.

Ideas that the US and world ending stocks could be adjusted lower for the USDA supply/demand reports tomorrow morning and talk of potential smaller crop from Ukraine for the coming season helped to support the market on the early break.

Weather was better than expected for Argentina overnight and wheat followed the corn market lower early and rallied with the corn market late to close higher.

Weekly export sales, for release in the morning, are expected to come in near 325,000 tonnes as compared with 168,200 last week.

Soybean Futures Closed Sharply Lower

March Soybeans finished down 29 at 1203, 29 off the high and 2 1/2 up from the low. May Soybeans closed down 28 1/2 at 1212 1/2. This was 2 up from the low and 28 1/2 off the high.

March Soymeal closed down 9.7 at 312.8. This was 1.2 up from the low and 9.9 off the high.

March Soybean Oil finished down 0.61 at 51.89, 0.56 off the high and 0.28 up from the low.

March soybeans closed 29 cents lower on the session and did not recovery from the early break. The market pushed lower early in the session and sharply lower on the day into the mid-session as long liquidation selling pressures helped to push the market back down into Friday's range.

A better than expected rain event for Argentina and southern Brazil has helped to drive the market lower as there are plenty of traders who believe that significant and permanent yield damage has been done for corn in South America but that soybean production potential can still recover "if" the weather turns more crop friendly for mid-January through mid-February.

Traders await key USDA Crop Production, Stocks in all Positions and Supply/Demand reports for release ahead of the opening tomorrow.

The strong US dollar added to the negative tone.

Weekly export sales, also released in the morning, are expected to come in near 475,000 tonnes as compared with 281,100 last week.

Meal sales are expected near 100,000 tonnes with oil sales near last week's level of 7,300 tonnes.

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