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CME: Corn Futures Closed Higher Tuesday

25 January 2012

US - March Corn finished up 10 1/4 at 630 1/4, 5 3/4 off the high and 15 3/4 up from the low. May Corn closed up 9 1/2 at 635 1/4. This was 14 3/4 up from the low and 5 1/4 off the high.

March corn closed sharply higher on the session and has now rallied as much as 43 1/2 cents from last week's lows. Rumors that Russia would tax exports supported wheat and rumors that Argentina may ban exports supported the corn rally but neither rumor could be confirmed.

However, near panic buying in the cash corn market in the Midwest and at the gulf for export has helped to support futures as the cash premiums have not been seen in many years. Bearish weather news from Argentina and a negative tone for outside market forces helped to pressure the market early.

However, speculative buying emerged to provide support with talk that the cash market is strong enough to keep buyers active on minor set-backs. Exporters who have booked recent deals to Mexico and others are finding it difficult to buy the corn in the cash market due to slow producer selling and surging basis levels.

Funds have been noted buyers on the session and the rally has pushed the market to the highest level since January 12th, the day of the bearish USDA updates on production and stocks. Open interest was up 7,949 contracts on the strong rally yesterday. March Rice finished down 0.065 at 14.615, 0.045 off the high and 0.085 up from the low.

Wheat Futures Closed Higher

March Wheat finished up 13 3/4 at 633 1/2, 4 1/2 off the high and 19 1/2 up from the low. July Wheat closed up 12 at 666 1/4. This was 17 1/4 up from the low and 1 1/4 off the high.

March wheat closed sharply higher on the session as rumors that Russia would impose a tax on exports to ensure wheat supply at home helped to spark some buying and short-covering. Weakness in the other grains and a negative tilt to outside market forces helped to pressure the market early.

However, a turn up in corn and talk that US wheat is now competitive on the world market helped spark some speculative buying early. The move back over yesterday's highs sparked aggressive short-covering and activated stops to drive the market sharply higher into the mid-session. The rally pushed the market to the highest level since January 12th. Talk of a record net short position from speculators added to the positive tone. March Oats closed down 1 at 294 1/2. This was 2 1/2 up from the low and 4 off the high.

Soybean Futures Closed Higher

March Soybeans finished up 2 1/2 at 1220, 9 1/2 off the high and 16 1/4 up from the low. May Soybeans closed up 3 1/4 at 1228 3/4. This was 16 3/4 up from the low and 9 1/4 off the high.

March Soymeal closed up 2.5 at 323.5. This was 5.3 up from the low and 3.8 off the high. March Soybean Oil finished down 0.07 at 51.35, 0.24 off the high and 0.35 up from the low. March soybeans closed slightly higher on the session as the market shook off early sharp selling pressures to turn higher with the help of strength in corn and wheat.

Rumors that Russia would tax exports supported wheat and rumors that Argentina may ban exports supported the corn rally and soybeans followed the other grains higher. A negative tilt to outside markets plus news that parts of Argentina received heavy rains in the last 24 hours helped to drive the market lower early in the session.

Sharply higher trade for corn and wheat helped drag the market back up near unchanged on the day into the mid-session. Traders indicated that drier parts of Santa Fe and Cordoba Argentina received 1 1/2 to 2 1/2 inches of rain in the last day and that this rain may go a long way in helping to boost crop conditions. In addition, the 6-10 day forecast was seen as "wetter" and this added to the negative tone overnight. Open interest was down 3,971 contracts on the strong rally yesterday.


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