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CME: Corn Futures Closed Higher Friday

24 September 2012

US - December Corn finished up 2 3/4 at 748 3/4, 5 3/4 off the high and 4 1/4 up from the low. March Corn closed up 3 at 752 1/2. This was 4 1/2 up from the low and 5 off the high.

December corn closed 2 1/4 cents higher on the session which left the market down 33 3.4 cents for the week. The market found support Friday from a sharply higher trade in wheat and positive outside markets.

Pressure continues to come from weak export conditions that could be a major limiting factor for the bull camp in the short term as South American corn is trading at a steep discount to the US.

South Korea's largest feed maker issued a tender for up to 140,000 tonnes of corn overnight. Furthermore, Japan's usage of corn in feed fell for the 7th straight month to a 20 year low in July.

Cash corn basis fell in Decatur, IL Thursday by 3 cents per bushel to 25 cents over the December contract as harvest progresses around the US Corn Belt.

Corn basis in the Gulf of Mexico for September fell by 3 cents per bushel to 60 cents over the December contract.

Midday support was also seen in corn after it was reported that nearly 1 million tonnes of corn may be at risk of damage by rain because of insufficient storage in Brazil.

The US Dollar traded lower on the day and most commodity markets were higher which added to the positive tilt.

November Rice finished up 0.05 at 15.24, 0.09 off the high and 0.02 up from the low.

Soybean Futures Closed Higher

November Soybeans finished up 3 at 1621 3/4, 17 1/4 off the high and 14 1/4 up from the low. January Soybeans closed up 4 1/4 at 1622. This was 14 1/2 up from the low and 15 1/2 off the high.

December Soymeal closed up 2.9 at 486.0. This was 4.9 up from the low and 4.0 off the high.

December Soybean Oil finished down 0.22 at 54.83, 0.63 off the high and 0.31 up from the low.

November soybeans closed 3 cents higher on the day after first trading down to the lowest level since August 15th. While inching higher on the day, November closed down $1.17 1/4 for the week.

The market traded slightly higher midday with talk of the oversold condition of the market and some short-covering helping to support.

Soybean and grain markets were able to bounce higher, mostly due to a lower US Dollar and a sharply higher wheat market.

Reports of better than average soybean yields continue to make managed money traders nervous and in effect, have triggered profit taking in soybeans all week.

Despite the surprising yields and hopes of increased production, export demand for soybeans and soybean meal continue to run at a staggering pace.

Some traders estimate that China bought 4-5 cargos of US Soybeans Thursday and it was announced overnight that US private exporters sold 140,000 tonnes of soybean meal to South Korea for 2012/13.

Cash soybean basis in the interior of the US was mixed with a processor in Lafayette, IN raising bids by 5 cents while a facility in Council Bluff, IA dropped their bids by 5 cents.

Wheat Futures Closed Higher

December Wheat finished up 17 3/4 at 897 1/4, 2 off the high and 17 3/4 up from the low. March Wheat closed up 16 1/2 at 908. This was 16 1/4 up from the low and 1 3/4 off the high.

December Chicago wheat closed 17 3/4 cents higher on the session and closed down 27 cents for the week. KC and Minneapolis wheat markets closed with similar gains on the day.

Rumors that Russia may enact policy to restrict grain exports resurfaced overnight after the Russian Economy Minister stated that restrictions could come this fall if domestic grain prices continue to rise.

The statement was later offset by the Deputy Prime Minister who said Russia had no plans to take action right now.

Traders continued to add risk premium to prices Friday as some anticipate better export demand hitting the US border from October through March of 2013.

A surge in feed wheat demand from Asian importers is also supportive to the trade. Japan announced they plan to buy 1.21 million tonnes of foreign wheat for animal feed which is up from their March plan of just 764,000 tonnes and South Korea's largest feed maker has issued a tender to buy up to 70,000 tonnes of feed wheat from any origin for January shipment.

Outside markets have also aided the wheat rally with the US dollar trading lower and stocks higher on the day.

December Oats closed up 2 3/4 at 376. This was 6 1/4 up from the low and 1 1/2 off the high.


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