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CME: Corn Futures Closed Higher Friday

25 June 2012

US - September Corn finished up 2 at 552 1/4, 14 1/4 off the high and 5 up from the low. December Corn closed up 5 1/2 at 555 1/2. This was 9 1/4 up from the low and 13 1/2 off the high.

The corn complex traded slightly higher Friday and posted a 13 cent range in the December contract. Corn prices climbed in Chicago as the market tempers it's expectation on the new crop corn yield.

Market participants generally agree that the 166 bushels/acre yield, issued in the latest USDA report, will need downward revisions in the next report.

Cash corn basis was weaker in the interior of the US and in Gulf of Mexico export channels on sluggish international demand and poor ethanol margins. The July corn contract lost to back end option months on the weak cash corn demand.

Furthermore, September corn traded a discount to the December corn contract for the first time this year. Timely rain in the lower Midwest later Wednesday and Friday of next week could provide temporary relief to stressed crops.

The 8 to 14 day temperature outlook shows above normal temperatures for the Corn Belt; mostly in the west. Precipitation looks below average for the east and above average for the west for the same 8 to 14 day period.

Short covering was noted Friday ahead of the Crop Progress Report next Monday and the June Stocks Report next Friday. September Rice finished up 0.14 at 14.725, 0.075 off the high and equal to the low.

Soybean Futures Closed Higher

August Soybeans finished up 2 at 1425, 22 3/4 off the high and 6 up from the low. November Soybeans closed up 1 1/4 at 1372 1/2. This was 8 up from the low and 18 off the high. August Soymeal closed down 5 at 419.7. This was equal to the low and 11.2 off the high.

August Soybean Oil finished down 0.15 at 49.84, 0.6 off the high and 0.37 up from the low. Soybeans traded slightly higher on the day but closed well off session highs. Slightly better world financial markets are providing broad based commodity market support.

Argentina soybean prices edged higher Friday on growing domestic demand and government officials cut soybean production to 40.3 million tonnes vs. the USDA estimate of 41.50 million tonnes. Futures rose in Chicago following the announcement as the market anticipates a shift in international demand from South America to the US due to their lower oilseed production.

Midday weather maps show restricted rainfall for the lower and eastern Midwest next week. A high pressure ridge will develop across the western plains next week producing near record heat in Texas, Oklahoma, and Kansas.

Bull spreading was active Friday. The July contract gained on the November option as traders expect demand to accelerate in the coming months. Short covering was noted ahead of the Crop Progress Report next Monday and the June Stocks Report next Friday. Soybean oil traded down.07 cents and soybean meal ended the day down $7.00.

Wheat Futures Closed Higher

September Wheat finished up 8 1/2 at 687, 13 off the high and 12 1/2 up from the low. December Wheat closed up 6 at 706 1/4. This was 10 3/4 up from the low and 14 1/4 off the high. July Chicago wheat traded sharply higher on the day and settled near the midpoint of the range.

World financial markets were steady to higher Friday and offering broad based commodity market support following Thursday's lower trade. Short covering was prevalent in most commodity markets, including wheat.

The warm and dry forecast for the Corn Belt has traders evening up positions ahead of the weekend. An updated Crop Progress report will be released Monday after. A reduction in the "Good to Excellent" category for corn and beans is likely.

NASS will issue their June Stocks Report next Friday. Traders continue to monitor international weather patterns as the FSU spring wheat crop could face considerable yield depletion due to warm and dry weather conditions over the next 7 to 10 days.

Calendar spreads in Chicago wheat gained Friday after better than expected export sales were released Thursday. Any further deterioration in international production, by major exporting countries, could shift more demand to the US market.

Managed money funds were buyers of wheat Friday as they covered a portion of their large short position. September Oats closed up 4 at 304. This was 4 up from the low and 8 3/4 off the high.

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