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CME: Corn Futures Closed Lower Tuesday

01 August 2012

US - September Corn finished down 13 1/4 at 806 3/4, 18 1/4 off the high and 1 1/2 up from the low. December Corn closed down 8 at 806. This was 4 1/2 up from the low and 14 1/2 off the high.

December corn traded slightly lower into the closing bell and managed to hold the 800 level on the day. The lower trade reflects profit taking following yesterday's sharply higher trade.

The Midwest weather forecast remains unfavorable for fall crops, with 90-100 degree temperatures expected for growing areas in the Southwestern Corn Belt this week and part of next week.

Scattered showers are also expected in the Midwest to finish out the week but soil conditions are so poor that the light rainfall will provide limited relief. Most of the corn crop is beyond repair at this point, but cooler temperatures may be able to stabilize yield loss for some areas.

Taiwan reportedly bought 60,800 tonnes of Brazilian corn overnight, which may be adding pressure to the corn complex today.

Argentina also announced that they would enact a new export policy that grants farmers permission to sell their whole corn harvest as they set single year export quotas, instead of the incremental quota system currently in place.

The market is still trying to gauge yield and production expectations for this year's corn crop ahead of the USDA report next week. Current market conditions suggest a corn yield near 129 bushels/acre with some estimates coming in near 120-122.

Outside markets were mixed today with the US Dollar trading lower and crude oil sharply lower on the day. September Rice finished down 0.22 at 15.615, 0.135 off the high and equal to the low.

Soybean Futures Closed Lower

August Soybeans finished down 4 3/4 at 1721, 21 off the high and 9 1/2 up from the low. November Soybeans closed down 2 1/2 at 1641. This was 11 1/4 up from the low and 22 1/4 off the high.

August Soymeal closed down 1.4 at 544.9. This was 3.5 up from the low and 9.3 off the high. August Soybean Oil finished down 0.02 at 52.55, 0.51 off the high and 0.4 up from the low. November soybeans traded slightly lower into the close but traded both sides of the unchanged today.

Early pressure was seen just prior to the start of pit trading, but the market found good support near the lows of the day. A late day sell off was linked to spillover pressure from a sharply lower wheat market and profit taking in corn.

The Midwest weather outlook for the next 2 weeks is offering support. Scattered showers are expected in the northern plains, parts of the central Midwest, and the eastern Corn Belt over the next week. Accumulation is expected to be light and be of very little benefit to soybean crops.

Blistering temperatures will move into the Southwestern Corn Belt today and tomorrow. Cooler temperatures are expected early next week, which may provide some relief to crops. Another round of above normal temperatures is forecasted for later next week.

Current price levels and crop reports suggest the market is trading a yield between 38-39 bushel/acre. Without cooler and wetter conditions in the next two weeks, soybean crops are susceptible to further yield deterioration. Outside markets were mixed today with the US Dollar trading lower and crude oil sharply lower on the day.

Wheat Futures Closed Lower

September Wheat finished down 26 1/4 at 888 1/4, 31 1/4 off the high and 2 1/4 up from the low. December Wheat closed down 24 3/4 at 902 1/2.

This was 2 up from the low and 29 off the high. September Chicago wheat traded sharply lower into the close of today's session as traders took profits following gains this week.

The wheat market began the day weaker, but losses were accelerated after corn began to tumble from it's record highs.

Russia's Agriculture Ministry may cut it's 2012 grain crop production forecast to 75 million tonnes from it's current estimate of 80 million tonnes but traders brushed off the news after the Prime Minister of Russia said he did not expect a domestic deficit for grain despite the lower production estimates.

Jordan announced a purchase of 100,000 tonnes of wheat from their tender issued last week. The official origin is unknown, but traders believe the seller likely came from the Black Sea region.

Outside markets were mixed with the US Dollar trading lower and crude oil trade sharply lower on the day. September Oats closed down 4 at 380 1/4. This was 2 1/4 up from the low and 5 off the high.

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