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CME: Corn Futures Closed Lower Wednesday

26 April 2012

US - July Corn finished down 7 at 601, 16 off the high and 1/4 up from the low. December Corn closed down 3 1/2 at 538. This was 2 up from the low and 8 3/4 off the high.

July corn closed moderately lower on the day after first trading moderately higher on the session. Funds were noted as aggressive sellers of near 12,000 contracts on the session. The market followed the soybean rally overnight and then got a boost near the opening due to more active sales announcements from China. However, similar to yesterday, there was buy the rumor, sell the fact type session which pulled the market lower on the day into the mid-session.

Slower ethanol demand and weaker wheat prices were also seen as negative forces. Private exporters reported a sale of 420,000 tonnes of US corn to unknown destination for the 2012/13 season. In addition, exporters reported a sale of 262,500 tones of US corn for China. Of the sale, 90,000 was for the 2011/12 season and 172,500 for the 2012/13 season.

Ethanol production for the week ending April 20th averaged 865,000 barrels per day. This is down 2.15 per cent vs. last week and down 2.04 per cent vs. last year. Corn used in last week's production is estimated at 92.1 million bushels. Corn use needs to average 94.2 million bushels per week to meet this crop year's USDA estimate. Stocks were 21.852 million barrels. This is down 0.53 per cent vs. last week and up 13.32 per cent vs. last year.

The outlook for sharply higher production this summer has continued to spark selling. The May USDA report will be the first look at the 2012/13 ending stocks. Traders see stocks near 1.8 billion bushels for the May report as compared with 801 million bushels for the 2011/12 season. July Rice finished up 0.075 at 16, 0.04 off the high and 0.15 up from the low.

Soybean Futures Closed Higher

July Soybeans finished up 11 at 1476, 20 3/4 off the high and 11 up from the low. November Soybeans closed up 18 1/2 at 1370 1/2. This was 20 1/2 up from the low and 1 1/4 off the high. July Soymeal closed up 1.5 at 417.2. This was 3.0 up from the low and 9.4 off the high. July Soybean Oil finished up 0.34 at 56.03, 0.26 off the high and 0.33 up from the low.

July soybeans closed 11 cents higher on the day and to a new high close but closed more than 20 cents off of the early highs. Weakness in the other grains and ideas that the market is overbought helped to spark the long liquidation selling to pull the market off of the highs. Rumors of China buying more US soybeans and continued talk of declining production estimates for South America, especially Argentina, helped to drive the market sharply higher.

The rally pushed nearby soybean futures to the highest level since July of 2008. Nearby meal has led the market higher, pushing to the highest level since July of 2009. There are rumors that China bought near 1 million tonnes of soybeans with a mix of old and new crop. Cash basis levels at the gulf remain firm as producer selling has been light even after the recent surge in pries. A turn lower in corn and wheat helped drag the market well off of the early highs. The weekly hatchery report showed that eggs set in the past week were down 4.5 per cent from last year.

Wheat Futures Closed Lower

July Wheat finished down 6 at 626 1/2, 16 1/4 off the high and 2 1/2 up from the low. December Wheat closed down 5 1/2 at 665 3/4. This was 2 1/4 up from the low and 13 1/2 off the high. July wheat pushed from higher to lower on the session to close moderately lower on the day.

Less fear of cold weather issues ahead plus ideas that the winter wheat crop yield potential is very high helped to pressure. The surge in soybeans, positive outside market forces and a surge higher in the stock market helped to support the strong opening. However, a lack of new buying interest and a push lower in corn sparked a fairly aggressive selling pace from fund traders and a moderately lower on the day trade in wheat into the mid-session.

Less cold weather in the forecast for the eastern Corn Belt plus more rain in the forecast for the plains were seen as negative weather forces which helped to pressure. Libya expected to import near 1 million tonnes in 2012. July Minneapolis wheat was down sharply on the day into the mid-session and down to the lowest level since January 20th. July Oats closed down 3/4 at 341 3/4. This was 6 1/2 up from the low and 3 1/4 off the high.

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