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CME: Corn Futures Closed Higher Monday

06 March 2012

US - May Corn finished up 5 3/4 at 660 3/4, 4 1/2 off the high and 8 1/2 up from the low. July Corn closed up 6 at 662 1/4. This was 8 1/2 up from the low and 3 1/2 off the high.

May corn closed moderately higher on the session today and pushed to the highest level since January 12th as China demand concerns, a more positive view on new crop supply outlook and some liquidation of soybean/corn spreads helped to support.

A sliding US Dollar helped corn prices recover from early pressure and climb towards a new 1 1/2 month high. Ongoing concern with high cash corn prices in China was widely seen as a positive factor for corn prices this morning.

Israeli private buyers tendered for 50,000 tonnes of corn before the open. Export Inspections for corn were at 30.977 million bushels, versus trade expectations of 30 to 34 million bushels.

Cumulative inspections have reached 50.6 per cent of the USDA forecast for the season as compared with the 5-year average for this time of the year at 48.8 per cent. The University of Missouri think tank (Food and Agriculture Policy Research Institute) supply/demand outlook may have helped to support the gains yesterday as well.

They pegged the 2012/13 corn production in the US at 13.916 billion bushels, down 354 million from the USDA Outlook Forum but up 1.558 billion from last year.

Ending stocks are pegged at 1.346 billion bushels from the USDA Outlook estimate of 1.616 billion and from 801 million this season. March Rice finished down 0.16 at 14.345, 0.055 off the high and 0.065 up from the low.

Wheat Futures Closed Lower

May Wheat finished down 2 1/2 at 672, 5 3/4 off the high and 4 1/4 up from the low. July Wheat closed down 3 1/2 at 682 3/4. This was 3 1/4 up from the low and 6 off the high.

May wheat pushed to the highest level since February 8th early in the session but weakness in soybeans and a negative perception of the global economy helped to spark selling and a lower close.

Talk of plentiful supply globally and talk that India may be in a position to expand exports helped to pressure. A rally in corn, follow-through technical buying and short-covering from last week's positive action and ideas that US export activity will be strong near-term helped to support. A sell-off in US equity markets helped to put wheat prices under early pressure.

A weaker dollar may have helped the market recover from early losses to push higher on the day. A report that the upcoming Australian wheat crop may have a 15 per cent decline from last season helped to underpin prices.

Iran reportedly is in talks to buy Russian and Indian wheat before the US and Europe impose trade sanctions. The University of Missouri think tank (Food and Agriculture Policy Research Institute) pegged the 2012/13 wheat production in the US at 2.239 billion bushels, up 74 million from the USDA Outlook forum and up 240 million bushels from last year.

Ending stocks are pegged at 966 million bushels from 845 million this year. Export Inspections for wheat were at 16.907 million bushels which was near trade expectations.

Cumulative wheat export inspections are running at 78.1 per cent of the USDA's estimate for the current crop year as compared with the 5-year average of 75.8 per cent for this time of the year. March Oats closed up 2 1/2 at 308 1/4. This was 2 3/4 up from the low and 5 1/2 off the high.

Soybean Futures Closed Lower

May Soybeans finished down 8 at 1325, 11 1/2 off the high and 2 up from the low. July Soybeans closed down 8 at 1332 1/4. This was 2 up from the low and 11 1/4 off the high. May Soymeal closed down 0.9 at 358.2. This was 0.9 up from the low and 2.2 off the high. May Soybean Oil finished down 0.35 at 53.73, 0.62 off the high and 0.03 up from the low.

May soybeans closed moderately lower on the session for the first lower close in 11 trading days. Good weather for harvest in South America and talk of the overbought condition of the market plus some liquidation of soybean./corn spreads helped to pressure. Sluggish global equity markets and lukewarm market sentiment put soybean prices under early pressure.

A trade forecast for this season's Brazilian soybean crop at 69.8 million tonnes, 2 million below their earlier estimate, helped to turn prices back towards the upside. A sell-ff in the Dollar after positively received US economic data also helped soybeans to recover early losses. Export Inspections for soybeans were at 32.552 million bushels which was near the low end of trade expectations.

Soybean export inspections are running at 71.2 per cent of the USDA's estimate for the current crop year as compared with 72.7 per cent as the 5-year average for this time of the year.

The University of Missouri think tank (Food and Agriculture Policy Research Institute) supply/demand outlook may have added to the negative tone today.

They pegged the 2012/13 soybean ending stocks at 301 million bushels, up 96 million from the USDA Outlook forum estimate at 205 million and up from 275 million this year.

The trade is leaning toward ending stocks closer to 150 million for new crop due to expanding demand after the short South America production but the think tank pegged total usage at 3.234 billion which is down 101 million from the USDA Outlook Forum estimate.


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