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CME: Corn Futures Closed Higher Tuesday

03 October 2012

US - December Corn finished up 1 1/2 at 758 1/4, 1 3/4 off the high and 12 1/4 up from the low. March Corn closed down 1/4 at 759 3/4. This was 10 3/4 up from the low and 3 off the high.

December corn ended the session slightly higher after trading lower early in the day. Bull spreading was prevalent and outright buying support was seen following last Friday's bullish USDA report.

Harvest pressure, weak demand, and unstable outside markets added to the short term negative tone. The weekly Corn Harvest report showed 54 per cent of the US harvest was complete compared to 39 per cent.

This was slightly below market expectations but favorable harvest conditions continue to push harvest along at a record pace.

Corn basis was marginally higher for some areas of the Midwest, specifically for ethanol markets in Illinois and Iowa.

Reports that farmers have shut off any further sales as they anticipate higher prices down the road added support to cash markets.

The US Dollar traded sharply lower throughout the day which added slight support to the corn market but marginal gains were offset by a sharply lower wheat market.

November Rice finished up 0.13 at 15.37, equal to the high and 0.07 up from the low.

Soybean Futures Closed Lower

November Soybeans finished down 30 1/2 at 1529 3/4, 31 1/2 off the high and 3 1/4 up from the low. January Soybeans closed down 30 1/4 at 1532 3/4. This was 2 3/4 up from the low and 31 1/4 off the high.

December Soymeal closed down 11.6 at 462.9. This was 0.7 up from the low and 12.4 off the high.

December Soybean Oil finished down 0.5 at 50.69, 0.66 off the high and 0.61 up from the low.

November soybeans traded sharply lower on the day while soybean meal and oil followed. Soybean oil saw significant pressure after Malaysian Palm Oil futures dropped to a fresh 3 year low overnight.

Long liquidation and better than expected soybean yields continue to be a drag on prices in the near term.

Many traders feel the USDA could increase the average US soybean yield by nearly 2 bushels per acre on the October 11th Supply and Demand report with current yield estimates at 35.3 bushels per acre.

Soybean basis bids fell in Decatur, IL and Lafayette, IN yesterday which added to the downside pressure and it was reported that additional weakness was seen in Frankfort, IN today as harvest advanced.

Many in the trade still believe Brazil is completely out of soybeans to sell for export going forward until their harvest is underway late in the 1st quarter of 2013 and this could add long term support to the market as importers come to the US for soybeans.

Taiwan issued an international tender to purchase up to 180,000 tonnes of soybeans for December through February shipment this morning.

Wheat Futures Closed Lower

December Wheat finished down 12 3/4 at 871 1/2, 13 1/2 off the high and 7 3/4 up from the low. March Wheat closed down 13 at 883. This was 7 1/2 up from the low and 13 1/2 off the high.

December Chicago wheat ended the day sharply lower while KC and Minneapolis followed. Traders took profits for the second day in a row after it was reported that more Black Sea wheat was offered in the latest Iraq tender at a discount to other world origins.

US exports remain behind the pace needed to reach this year's USDA forecast which continues to add pressure to prices.

Romanian wheat was reportedly the cheapest offer on the tender since they have stepped into the export market as Russia moves aside.

Russia may release 500,000 tonnes of wheat out of their domestic reserves amid rising food prices due to this year's lower grain production.

The weekly Winter Wheat Planting report showed 40 per cent of winter wheat planting was complete compared to 25 per cent last week and 36 per cent last year.

Recent rainfall in Oklahoma and southern Kansas has helped soil conditions and early germination however Nebraska, central Kansas, and north central Kansas continue to suffer from dry conditions which could add support to prices down the road.

The US Dollar was lower on the day but most commodity markets underperformed as Eurozone fears resurfaced overnight.

December Oats closed down 6 1/4 at 360 1/4. This was 2 up from the low and 7 off the high.

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