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CME: Corn Futures Closed Up on Wednesday

28 February 2013

US - May Corn finished up 1/4 at 695, 3 3/4 off the high and 3 3/4 up from the low. July Corn closed down 1/4 at 678 3/4. This was 2 1/4 up from the low and 4 1/2 off the high.

The March contract extended its premium to the May contract today as cash basis firmed in delivery markets. The spread made a new high for the move at +17 1/4 premium the March before backing off modestly in the second half of the day. This morning's ethanol report was positive for market direction after ethanol production for the week ending February 22nd averaged 812,000 barrels per day, up 1.9% vs. last week and down 9.4% vs. last year. Total ethanol production for the week was 5.7 million barrels. Corn used in last week's production is estimated at 85.3 million bushels, up from 83.7 the week prior. This crop year's cumulative corn used for ethanol production is 2.12 billion bushels. Corn use needs to average 87.7 million bushels per week to meet this crop year's USDA estimate of 4.5 billion bushels. Stocks as of February 22nd were 19.4 million barrels, down 0.6% vs. last week and down 11.9% vs. last year. Implied demand (Production plus imports minus the change in stocks) was estimated at 6.03 million barrels, up from 5.7 the week prior. The improvement in implied demand mixed with the decline in stocks is seen as supportive to the industry and corn market short-term.

May Rice finished down 0.01 at 15.77, 0.06 off the high and 0.01 up from the low.

Soybeans

May Soybeans finished up 6 1/4 at 1438, 10 3/4 off the high and 13 up from the low. July Soybeans closed up 7 1/2 at 1426. This was 15 up from the low and 8 1/4 off the high.

May Soymeal closed up 1.8 at 428.6. This was 4.3 up from the low and 3.7 off the high.

May Soybean Oil finished up 0.26 at 49.65, 0.25 off the high and 0.38 up from the low.

May soybeans traded higher on the day but fell well off the session highs midday and saw sell pressure at the closing bell. Traders noted interest in buying the July vs. November calendar spread as the market attempts to ration US domestic crush demand. Buying support was also found as the market monitors the long delays to load soybean vessels in Brazil. Soybean basis in the US was steady to slightly weaker as the barge markets back off slightly and domestic crush margins contract modestly. The USDA reported this morning that US private exporters sold 120,000 tonnes of US soybeans to an unknown destination for the 2012/13 marketing year. Exporters also sold 120,000 tonnes of soybeans to China for the 2013/14 marketing year. Weather conditions in South America are mixed this week with Argentina drying down slightly today and tomorrow until showers come back on Friday. Brazil continues to see a favorable mix of scattered showers and non-threatening temperatures.

Wheat

May Wheat finished up 1 at 712, 10 off the high and 2 1/4 up from the low. July Wheat closed up 1 at 715. This was 2 up from the low and 9 1/2 off the high.

Wheat markets traded higher on the day as export demand continues to accelerate for US soft wheat which has prompted a fair amount of short covering due to the large net short position held by hedge funds. India issued another tender to export wheat this morning. One of their state-run agencies announced 200,000 tonnes for export and this is on top of a separate tender yesterday for 200,000 tonnes. India continues to sell wheat in the global market as it attempts to clear out old stocks ahead of another bumper new crop harvest. Saudi Arabia issued a tender midday for 110,000 tonnes of soft red winter wheat and 440,000 tonnes of hard red winter wheat for June, July, and August shipment. Chicago March wheat gained on corn after briefly trading a discount yesterday. The US Dollar was lower for most of the day but commodity markets were mixed with crude oil seeing modest gains, natural gas turned sharply lower late in the session, and metal markets were pressured throughout the day.

May Oats closed unchanged at 371 3/4. This was 4 3/4 up from the low and 1 1/2 off the high.


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