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CME: Corn Futures Closed Lower Thursday

02 March 2012

US - May Corn finished down 4 at 654, 4 off the high and 3 1/2 up from the low. July Corn closed down 5 at 655 1/2. This was 2 1/4 up from the low and 5 off the high.

May corn closed moderately lower on the day but near the middle of a choppy trading session. Traders suggested that the selling may have been profit-taking from funds and specs.

Uncertainty with the outside market forces plus more talk that the market is in a short-term overbought condition after following soybeans higher recently helped trigger some fund trader selling early today.

The weakness in soybean values overnight helped to spark the selling. Weekly export sales for corn came in at 690,000 metric tonnes for the current marketing year and 23,000 for the next marketing year for a total of 713,000 which was a little below trade expectations.

However, China was included as a buyer of 122,000 tonnes of the total and reports that Argentina is unlikely to be an aggressive seller to China until later this year were factors which helped to support.

As of February 23, cumulative corn sales stand at 71.5 per cent of the USDA forecast for 2011/2012 (current) marketing year versus a 5 year average of 66.6 per cent.

Sales of 452,000 metric tonnes are needed each week to reach the USDA forecast. There have been no deliveries for the first two days of the delivery period for March corn. March Rice finished down 0.215 at 14.245, 0.195 off the high and 0.055 up from the low.

Wheat Futures Closed Lower

May Wheat finished down 4 at 664, 8 1/2 off the high and 5 1/4 up from the low. July Wheat closed down 4 1/2 at 676. This was 3 3/4 up from the low and 9 off the high. May wheat closed lower on the session after choppy and two-sided trade. The weakness in corn and mixed trade for the US dollar clashed with higher trade for soybeans and positive action for equity markets to keep the trade choppy.

Ideas that the market was a bit overbought after the three-day rally plus a firm tone to the US dollar early helped to pressure the market early. However, talk that the winter wheat crop may be coming out of dormancy too early plus ideas that the western and southern sections of the winter wheat belt are not seeing enough rain in the forecast helped to support a rally to higher on the day into the mid-session.

Minneapolis wheat fell sharply last week but closed higher for the 4th session in a row basis the May contract. Weekly export sales came in at 414,100 metric tonnes for the current marketing year and 95,000 for the next marketing year for a total of 509,100 which was lightly below trade expectations.

As of February 23, cumulative wheat sales stand at 90.1 per cent of the USDA forecast for 2011/2012 (current) marketing year versus a 5 year average of 86.7 per cent. Sales of 186,000 metric tonnes are needed each week to reach the USDA forecast. On top of the weekly sales, private exporters reported the sale of 120,000 tonnes of US hard winter wheat to Iran for the 2011/12 season. This sale will need approval from the Treasury Department.

The European Union granted export licenses for 429,000 tonnes of wheat this week which pushed the cumulative total for the 2011/12 season to 9.1 million tonnes as compared with 13.8 million last year by this date. March Oats closed down 5 1/4 at 309 1/4. This was 5 3/4 up from the low and 5 3/4 off the high.

Soybean Futures Closed Higher

May Soybeans finished up 2 1/2 at 1322 1/2, 1 1/4 off the high and 16 1/4 up from the low. July Soybeans closed up 1 3/4 at 1329 1/2. This was 15 3/4 up from the low and 1 1/2 off the high. May Soymeal closed up 2.6 at 355.5. This was 6.9 up from the low and 0.2 off the high.

May Soybean Oil finished down 0.2 at 54.27, 0.25 off the high and 0.2 up from the low. May soybeans closed slightly higher on the session and the market has closed higher in 13 of the past 14 trading days. The market was down as much as 13 3/4 cents overnight led by concerns for the extreme overbought condition of the market after the recent run higher and ideas that Brazil supply is on a rise over the near-term.

November soybeans gained on old crop as traders see the need for more planted area and the market saw the highest close since September 21st. Ideas that China buying might slow over the near-term was also seen as a factor to spark some long liquidation, profit-taking type selling overnight and early today.

However, outside market forces turned positive after the lower trade early and the market managed to trade higher on the day into the mid-session. A dock worker strike at the key export port in Argentina today helped to provide some support as well. Argentina's President pegged the Argentina soybean crop at 48 million tonnes which is in line with the last USDA estimate but well up from recent trade expectations.

Weekly export sales for soybeans came in at 549,100 metric tonnes for the current marketing year and 427,300 for the next marketing year for a total of 976,400 which was higher than traders expected and comes on the heals of last week's 4 million plus sales. Cumulative soybean sales stand at 83.4 per cent of the USDA forecast for 2011/2012 (current) marketing year versus a 5 year average of 87.1 per cent.

Sales of 211,000 metric tonnes are needed each week to reach the USDA forecast. Meal sales came in at just 40,000 metric tonnes which was well below expectations and oil sales came in at 4,800 metric tonnes which was also short of expectations. Cumulative soybean oil sales stand at 50.5 per cent of the USDA forecast for 2011/2012 (current) marketing year versus a 5 year average of 56.5 per cent. Sales of 8,000 metric tonnes are needed each week to reach the USDA forecast.


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