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CME: Corn Futures Closed Lower Monday

09 October 2012

US - December Corn finished down 6 at 742, 6 off the high and 2 up from the low. March Corn closed down 6 1/2 at 742. This was 1 3/4 up from the low and 6 1/4 off the high.

December corn ended the day slightly lower in what was a low volume session and the weaker trade was linked to profit taking ahead of this Thursday's USDA report.

Marginal support was seen from a higher wheat market but this was largely offset by a surging US Dollar and weaker soybean market.

Weekend rainfall was extensive in growing regions of Argentina which should benefit early planted corn. Argentina's government believes that 4.97 million hectares of corn will be planted this year vs. 5 million in 2011/12.

The weather outlook also included better rainfall for central Brazil by this weekend and again in the 11-15 day forecast.

This should benefit dry areas in Brazil and early planted corn. The US forecast looks favorable for harvest progress with showers limited to the southern plains later this week and the trade believes corn harvest is close to 70 per cent complete.

Corn basis was steady throughout the day as futures declined but farmers have been reluctant sellers of anymore cash corn in hopes that prices will move higher later this quarter.

November Rice finished up 0.26 at 15.365, equal to the high and 0.045 up from the low.

Soybean Futures Closed Lower

November Soybeans finished down 1/2 at 1551, 10 off the high and 13 1/2 up from the low. January Soybeans closed down 3 at 1548. This was 12 3/4 up from the low and 11 off the high.

December Soymeal closed up 1.4 at 472.6. This was 6.8 up from the low and 1.5 off the high.

December Soybean Oil finished down 0.26 at 50.93, 0.62 off the high and 0.08 up from the low.

November soybeans traded slightly lower into the close while the March 2013 contract saw double digit losses. Soybean oil ended the day lower but soybean meal was able to rally at the closing bell to close in positive territory.

Profit taking added a negative tilt to today's price action as outside markets slid lower and the US Dollar moved higher on the day.

Underlying support continues to come from a steady appetite of US soybeans from China and the fact that new farmer sales continue to be slow as many await higher prices later this quarter.

Many in the market feel harvest was close to 60 per cent complete as of Sunday. Traders reported that bull spreading was active throughout today's session and basis was steady to firm as processors attempt to drum up movement of cash soybeans in the country.

Weekend weather in South America was favorable with rainfall in areas of Argentina and Brazil. More precipitation is expected to spread to Brazil soybean growing regions later this week which should benefit early planted crops and ease stress.

Wheat Futures Closed Higher

December Wheat finished up 3 1/2 at 861, 6 1/2 off the high and 6 up from the low. March Wheat closed up 2 1/2 at 871 1/4. This was 4 1/2 up from the low and 7 off the high.

December Chicago wheat ended the day in positive territory but well off session highs. Kansas City and Minneapolis wheat traded higher as well with KC leading all three wheat markets on the day.

Support was linked to fears that freezing temperatures in parts of Oklahoma, Nebraska, and Colorado may have damaged emerging wheat and some replanting may be needed. Furthermore, nearly a quarter of the Hard Red Winter wheat growing area remains drier than normal.

Long term support in wheat continues to come from thoughts that the world wheat balance sheet is tightening which could spur on US exports later this year.

US wheat continues to be overpriced in the world market as France and Australia step in to cover business in the Middle East.

Iraq made no purchase on their 50,000 tonne wheat tender and it's estimated that Russia exported 10.29 million tonnes of wheat in the first 8 months of 2012. Outside markets added a slightly negative tilt to commodity complex throughout the day with US stocks trading lower and the US Dollar higher on the day.

December Oats closed up 3 1/4 at 370 1/2. This was 5 up from the low and 1 off the high.

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