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CME: Corn Futures Closed Higher Wednesday

01 March 2012

US - May Corn finished up 3/4 at 658, 3 1/2 off the high and 4 3/4 up from the low. July Corn closed up 1 3/4 at 660 1/2. This was 5 up from the low and 2 3/4 off the high.

May corn managed to close slightly higher after choppy and two-sided trade. December corn closed sharply higher on the session and up to the highest close since February 8th.

The market saw some solid buying support early in the session to push futures up to the highest level since January 11th but a turn negative in outside market forces helped to spark a sell-off to lower on the day into the mid-session.

A sharp break in the metal markets and weakness in equity markets plus a turn higher in the US dollar helped to spark some long liquidation selling in many commodity markets. The USDA announced a sale of 120,000 tonnes of US corn to Mexico for the 2012/13 season. South Korea seeks 420,000 tonnes of US or optional origin corn.

Ethanol production for the week ending February 24th averaged 896,000 barrels per day. This is down 2.5 per cent vs. last week and up 1.6 per cent vs. last year. Total Ethanol production for the week was 6.272 million barrels.

Corn used in last week's production is estimated at 95.44 million bushels. Corn use needs to average 94.3 million bushels per week to meet this crop year's USDA estimate.

Stocks were 22 million barrels which is a record high and up 2.1 per cent vs. last week and up 15 per cent vs. last year. Traders see weekly export sales for release in the morning near 750,000 tonnes from 840,800 tonnes last week. March Rice finished up 0.03 at 14.46, 0.04 off the high and 0.14 up from the low.

Wheat Futures Closed Lower

May Wheat finished down 1/4 at 668, 6 1/2 off the high and 7 3/4 up from the low. July Wheat closed up 1 at 680 1/2. This was 9 up from the low and 4 1/2 off the high. May wheat closed slightly lower on the session after choppy and two-sided trade.

The market saw some follow-through short-covering from fund traders to push the market to the highest level since February 8th early in the session.

However, a turn down in equity markets, a sharp drop in metal prices and a rally in the US dollar helped to pressure the market to trade lower on the day into the mid-session. Higher trade for corn and soybeans helped to support the market late in the day. Trade estimates that about 1 million tonnes of damaged occurred to the French wheat crop due to recent cold weather helped to provide underlying support.

News of a record India wheat production outlook this year for the 5th year in a row was seen as a negative force. Traders indicated that the warmer late winter weather in the plains has helped to speed up growth of the wheat crop and this leaves the crop vulnerable to freeze damage if there is a late season cold blast.

Traders see weekly export sales for release in the morning near 600,000 tonnes. March Oats closed up 3/4 at 314 1/2. This was 3 up from the low and 1 3/4 off the high.

Soybean Futures Closed Higher

May Soybeans finished up 7 1/2 at 1320, 4 1/4 off the high and 12 up from the low. July Soybeans closed up 8 at 1327 3/4. This was 12 1/4 up from the low and 4 off the high. May Soymeal closed up 3.6 at 352.9. This was 5.6 up from the low and 1.3 off the high.

May Soybean Oil finished down 0.33 at 54.47, 0.4 off the high and 0.14 up from the low. May soybeans have closed higher on 12 of the past 13 trading sessions with the higher close today as a surge higher in the US dollar and a massive break in gold and silver could not even hold the market back today.

The market pushed moderately lower on the session early led by a turn down in precious metal markets and weakness in the stock market plus a turn higher in the US dollar.

Talk of the overbought condition of the market added to the early selling. However, more export news plus concerns over slow export movement out of Brazil which might spark an increase in US old crop export sales helped to support.

The rally pushed the market to the highest level since September 22nd. The USDA announced a sale of 285,000 tonnes of US soybeans to China with 175,000 for the 2011/12 season and 110,000 for the 2012/13 season.

Basis levels have held steady despite the recent run-up in futures which has added to the positive tone. The lack of deliveries for soybeans and meal was also seen as a supportive factor.

Traders see increased selling out Brazil once exporters have a better feel for supply and once the soybean harvest picks up steam. Traders see weekly export sales for release in the morning near 600,000 tonnes as compared with 4.032 million tonnes last week.


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