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CME: Corn Futures Closed Lower Monday

25 September 2012

US - December Corn finished down 3 1/2 at 744 3/4, 6 1/2 off the high and 8 1/2 up from the low. March Corn closed down 2 1/4 at 748 3/4. This was 8 1/2 up from the low and 5 1/4 off the high.

December corn traded slightly lower into the close and managed to bounce late in the session to settle off the lows of the day.

The US Dollar traded sharply higher on the day which added to the poor performance of most commodities. Weekend harvest weather in the US was good and the trade expects corn harvest to be near 40 per cent complete in this afternoons Harvest Progress report.

Corn basis remained steady across the Corn Belt but a commercial facility in northern Indiana raised their bid by 8 cents per bushel as local supplies tightened.

Physical traders noted that farmers planned to store good quality corn while selling poor quality. Exports remain weak but corn has widened its discount to wheat which could pull more feed demand its way in the short term.

Illinois requested permission from the FDA to blend high aflatoxin corn with good quality corn to be used in animal feed. Iowa just recently was granted permission and Illinois is the second state to request the waiver.

South Korea bought 65,000 tonnes of corn overnight and rejected all feed wheat offers.

Export inspections for the week ending September 20th were reported at 24.23 million bushels vs. 27.89 the week prior and cumulative inspections for this crop year are running 4.8 per cent of the USDA estimate vs. the 5 year average of 6.1 per cent.

November Rice finished down 0.055 at 15.185, 0.065 off the high and equal to the low.

Soybean Futures Closed Lower

November Soybeans finished down 11 3/4 at 1610, 16 off the high and 19 3/4 up from the low. January Soybeans closed down 11 at 1611. This was 20 up from the low and 14 3/4 off the high.

December Soymeal closed down 1.8 at 484.2. This was 7.1 up from the low and 3.6 off the high.

December Soybean Oil finished down 0.66 at 54.17, 0.9 off the high and 0.85 up from the low.

November soybeans traded lower into the close and the complex saw double digit losses for most of the day.

Soybean meal and oil were also weaker on the day. Negative outside markets and better than expected yields continue to weigh on futures but strong underlying support is coming from a favorable demand outlook over the next 3-6 months.

Export inspections for the week ending September 20th were reported at 12.12 million bushels vs. 9.96 the week prior. Cumulative inspections for this crop year are running 3.1 per cent of the USDA estimate vs. the 5 year average of 3.9 per cent.

Favorable weather conditions in South America have added ammo to the bear camp to start the week and more rainfall is expected this week and in the 11-15 day period for northern Brazil.

It's being reported that planting has begun in Brazil and 2012/13 soy sales held steady at 46 per cent from the previous week following the recent decline in prices.

Many traders believe the US soybean harvest will be near 20 per cent complete in this afternoons Harvest Progress report.

Good weather this week and a drier long term outlook will continue to keep the harvest pace above historical levels which could be viewed as a short term negative for prices by some.

Wheat Futures Closed Lower

December Wheat finished down 5 1/4 at 892, 15 1/4 off the high and 8 3/4 up from the low. March Wheat closed down 4 1/4 at 903 3/4. This was 9 1/2 up from the low and 13 off the high.

December Chicago wheat traded down on the day but settled off session lows. Kansas City and Minneapolis wheat were also weaker with Minneapolis leading the complex.

A promising forecast for rain in the western plains along with better the advertised moisture in southern Australia added to the negative trade today.

The outside markets also offered resistance to price gains as equity markets traded lower and the US dollar was higher on the day.

Iraq issued a tender to buy 50,000 tonnes of wheat overnight, Turkish buyers bought 25,000 tonnes of milling wheat from Ukraine, and South Korea rejected all feed wheat offers for its tender released Friday and instead booked corn.

The export lineup remains light but Morocco is expected to tender soon after it took its import duty on wheat to zero. Traders continue to watch developments in Russia closely as some expect their export pace to slow as we head into October.

This could be supportive to US wheat prices this winter. Export inspections for the week ending September 20th were reported at 22.42 million bushels vs. 29.37 the week prior.

Cumulative inspections for this crop year are running 28 per cent of the USDA estimate vs. the 5 year average of 33 per cent.

December Oats closed up 1/2 at 376 1/2. This was 6 1/2 up from the low and equal to the high.


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