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CME: Corn Futures Closed Lower Wednesday

04 October 2012

US - December Corn finished down 1 1/2 at 756 3/4, 6 3/4 off the high and 9 3/4 up from the low. March Corn closed down 2 1/4 at 757 1/2. This was 9 1/4 up from the low and 6 3/4 off the high.

December corn ended the session slightly lower on the day but traded into positive territory near the closing bell. Corn found support late in the session after soybeans and wheat rallied off session lows.

Midsession weakness was linked to sharply lower wheat and soybean markets and profit taking after a closely followed trade house reported their average corn yield at 123.9 bushels per acre vs. 121.4 previously.

Production rose to 10.827 billion bushels vs. 10.607 previously. The USDA in September showed a 122.8 yield and production at 10.727 billion bushels.

Additional pressure was added after Ethanol production for the week ending September 28th averaged 785,000 barrels per day.

This is down 3 per cent vs. last week and down 9 per cent vs. last year. Corn used in last week's production is estimated at 82.4 million bushels vs. 84.9 the week prior.

Weekly ethanol production and weekly corn usage in ethanol production were pegged at their lowest levels since October 30, 2009.

The US Dollar traded higher throughout the day and crude oil fell 4 per cent which limited gains in the grain market.

November Rice finished down 0.13 at 15.24, 0.08 off the high and equal to the low.

Soybean Futures Closed Higher

November Soybeans finished up 1 at 1531 1/2, 12 1/4 off the high and 27 1/2 up from the low. January Soybeans closed down 1 1/4 at 1532. This was 25 3/4 up from the low and 11 1/2 off the high.

December Soymeal closed up 1.5 at 464.4. This was 9.3 up from the low and 3.9 off the high.

December Soybean Oil finished up 0.04 at 50.73, 0.32 off the high and 0.67 up from the low.

November soybeans were on their way to test $15.00 in early trade today but managed to find support late in the session to close in positive territory.

Bullish traders suggested yields might be better than expected but pointed to the staggering export demand pace as reason for prices to move higher.

A closely followed trade house released their revised US average soybean yield and production estimates after the close yesterday.

The average soybean yield was reported at 38.2 bushels per acre vs. 36.7 in September. Production rose to 2.849 billion bushels vs. 2.739 previously. The USDA in September had yield at 35.3 and production at 2.634 billion bushels.

Most in the trade expect demand to be revised higher if soybean yields rise on next week's USDA report. This could offset some of the bearish enthusiasm in the long term.

China remains on holiday this week but it was reported this morning that 21,000 tonnes of US Soybean Oil was sold to China overnight for 2012/13 delivery. This offered a brief period of support for soybean oil futures.

Outside markets limited price gains as the US Dollar traded higher and crude fell by 4 per cent.

Wheat Futures Closed Higher

December Wheat finished up 1 1/2 at 873, 5 1/2 off the high and 15 up from the low. March Wheat closed up 1 at 884. This was 15 1/2 up from the low and 5 1/2 off the high.

December Chicago wheat ended the session nearly unchanged while KC ended lower and Minneapolis higher.

Long liquidation continued overnight as outside market instability became prevalent following the European open and the downside momentum accelerated after it was announced that the US failed to do any of the Egyptian wheat tender overnight.

Egypt bought 240,000 tonnes of French and Argentinian soft wheat for December 11-20th shipment. The spread between French and US soft wheat narrowed from the last tender and there was no Russian or Ukrainian wheat offered.

The wheat market rallied late in the session after corn and soybeans climbed off session lows and turned positive.

The lower trader early on was linked to weather forecasts that suggest more rain for areas of Kansas, Oklahoma, and Texas next week which will likely ease soil moisture deficits for wheat planting.

Outside markets offered very little support throughout the day with crude oil trading 4 per cent lower and the US Dollar climbed higher.

December Oats closed up 3 at 363 1/4. This was 5 1/4 up from the low and 2 1/4 off the high.

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