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CME: Corn Futures Closed Limit Up Monday

26 June 2012

US - September Corn finished up 40 at 591 1/4, equal to the high and 25 1/2 up from the low. December Corn closed up 40 at 594. This was 23 3/4 up from the low and equal to the high.

The corn complex traded sharply higher on the day, posting limit higher moves in September, December, and March corn. July corn lost to the December contract on bullish new crop weather data, however, even July corn was trading near limit-up late in the session.

December corn gapped higher on the open and touched fresh 5 month highs. Trade volume was above average today. Demand remains sluggish for US corn as reports surfaced today that China continues to have strong interest in Argentinean corn.

Furthermore, our research shows that while Ethanol Margins are marginally higher, week over week, they continue to run at some of the lowest levels we have on record.

Afternoon weather models show a cooler and wetter pattern for the southern Midwest, beginning next Monday. Confidence and accumulation is low at this point in time. Western Corn Belt regions, especially southern areas, look to turn very hot in the next two weeks with mid-90's and even 100 degree temperatures common in the week ahead.

This has traders nervous over yield loss due to stress for pollination. Traders expect the corn good to excellent ratings to be revised lower in the afternoon Crop Progress Report by 2 per cent. Weekly Net Export Inspections, released for the week ending June 21st, were reported above market estimates at 27.01 million bushels.

Inspections need to average 34.4 million per week to reach the USDA projection for the marketing year. September Rice finished up 0.215 at 14.94, equal to the high and 0.14 up from the low.

Soybean Futures Closed Higher

August Soybeans finished up 42 1/4 at 1468 1/4, 10 3/4 off the high and 25 3/4 up from the low. November Soybeans closed up 50 1/4 at 1425 3/4. This was 27 1/4 up from the low and 11 1/4 off the high. August Soymeal closed up 9.5 at 429.2.

This was 5.8 up from the low and 6.6 off the high. August Soybean Oil finished up 1.56 at 51.4, 0.36 off the high and 1.13 up from the low. November soybeans surged to 50 cents higher heading into the closing bell and the market managed to push to new contract highs.

Soybean futures rose in Chicago after morning weather maps showed that crops in the lower and eastern Midwest will see no significant stress relief, at least through Wednesday of this week. Afternoon weather models show a cooler and wetter pattern for the southern Midwest, beginning next Monday.

Confidence and accumulation for this idea is low at this point in time. Western Corn Belt regions, especially southern areas, look to turn very hot in the next two weeks with mid-90's and even 100 degree temperatures common in the week ahead.

The dry conditions are making it difficult for farmers to double crop beans over harvested wheat. The US Dollar is trading slightly higher while stocks are lower on the day, ahead of the European Summit later this week.

November soybeans received additional strength after the USDA reported that private exporters sold 120,000 tonnes of new crop soybeans to China this morning. Weekly Net Export Inspections, released for the week ending June 21st, were reported below market estimates at 9.18 million bushels.

Inspections need to average 12.8 million per week to reach the USDA projection for the marketing year. Traders expect the soybean "good to excellent" ratings to be revised lower in the afternoon Crop Progress Report.

Wheat Futures Closed Higher

September Wheat finished up 53 at 740 1/2, 1 1/2 off the high and 44 1/4 up from the low. December Wheat closed up 50 1/4 at 757. This was 40 up from the low and 3 off the high. The Chicago wheat complex traded sharply higher early today trading as much as 51 3/4 higher on the day early.

The market found more technical support on the move through the May highs and after a minor set-back into the mid-day, futures pushed back up to make new highs for the day into the close. The US Dollar was trading slightly higher while stocks were sharply lower on the day ahead of the European Summit later this week. Short covering and outright buying in wheat was noted, following the gap higher open in corn.

Wheat futures extended gains after the Russia Agriculture of Ministry revised their wheat crop forecast for 2012/13 at 46 to 49 million tonnes vs. current USDA estimate of 53 million tonnes. Russian wheat exports were also revised lower to 16 to 18 million tonnes, from 20 million tonnes.

The USDA currently has Russian wheat exports at 16 million tonnes for 2012/13. The Paris Matif wheat futures climbed to a new one year high on the news. Furthermore, Statistics Canada will release crop planting estimates on Wednesday.

Early indications suggest Canadian farmers will trim wheat plantings in favor of canola due to higher oilseed prices and expected increases in international demand. Weekly Net Export Inspections, released for the week ending June 21st, were reported in the range of market estimates at 19.48 million bushels.

Inspections need to average 22 million per week to reach the USDA projection for the marketing year. September Oats closed up 20 at 324. This was 19 up from the low and equal to the high.


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