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CME: Corn Futures Closed Higher Tuesday

17 July 2013

US - September Corn finished up 9 at 545 1/4, 4 1/2 off the high and 6 1/4 up from the low. December Corn closed up 7 1/4 at 510 3/4. This was 4 3/4 up from the low and 7 3/4 off the high.

September corn finished higher on the day and settled in just above the 50% retracement of high and low for the month of July.

Bull spreading in the Sept/Dec spread showed back up today following yesterday's setback. Basis levels in the Gulf and interior markets remain strong with the ethanol market leading as the aggressive bidder.

Cash bids around central IL were near $7 but producer sales continue to be light as many are being patient to see how their newly planted crops fair over the next 1-2 weeks when a large portion of the Corn Belt will pollinate.

Traders indicated midday that the next sales target for many was around $7.50 cash. The weather remains the dominate factor in the market over the next 14-21 days and the European weather model placed a high pressure ridge in the Midwest overnight which helped to support the move higher to start the session.

The midday update suggested the warm and dry trend may not be as extreme which took the market off its day-session highs. The 5 day forecast remains mostly dry for the Corn Belt with the most extensive heat over the next 3 days.

Crop condition ratings were also constructive to the upside action today with some crop scouts reporting that unplanted corn acreage in northeast IA and southern MN could be much worse than the USDA is indicating at the moment.

The wet spring and start to the summer could have resulted in up to 2-3 million preventative planted acres according to some sources but this will remain an unknown for some amount of time.

September Rice finished up 0.09 at 15.26, equal to the high and 0.03 up from the low.

Soy Futures Closed Higher

August Soybeans finished up 21 1/2 at 1475 1/4, 12 3/4 off the high and 22 1/4 up from the low. November Soybeans closed up 22 1/2 at 1286 1/4. This was 20 3/4 up from the low and 10 3/4 off the high.

August Soymeal closed up 15.3 at 466.8. This was 14.6 up from the low and 3.9 off the high.

August Soybean Oil finished down 0.13 at 45.71, 0.53 off the high and 0.08 up from the low.

The soybean market traded sharply higher on the day and found good buying support on a setback at the midpoint of the session near the 50% retracement of the June high to July low. Strong buying support was seen into the closing bell.

Bull spreading was active again today both in the old vs. new crop soybean complex as well as the meal market.

Basis bids remain extremely strong on the river and in interior processing markets with facilities in the east paying 130 to 140 over. Meal end users were attempting to hold off on more coverage due to strong cash premiums and the massive inverse between nearby shipment and forward delivery.

Supplies remain extremely tight and there was some talk today that Argentina meal was close to working into the US but nothing has been confirmed.

The weather remains a wild card at this point with plenty of time left to make or break the new crop.

Conditions are trending drier for areas of NE and IA but weather patterns have impacted the crops more favorably in IL and to the east.

Weather premium is likely to remain in the market for a substantial period of time until there is more clarity and conviction as to the overall production potential given how tight the US old crop supply is.

Wheat Futures Closed Unchanged

September Wheat finished unchanged at 669 1/2, 12 off the high and 4 up from the low. December Wheat closed up 1/4 at 682 1/2. This was 4 up from the low and 11 1/2 off the high.

Wheat futures traded sharply higher in early trade but found sellers at midsession as corn setback. Strong buying support into the closing bell helped to lift the market off session lows to close in the green.

A warm and dry weather trend across the Corn Belt this week was supportive to corn and soybeans which spilled over to the wheat market.

Export news was quiet today following supportive inspection data yesterday. It was reported overnight that Russia was the lowest offer on the Iraq hard wheat tender and beat out the best US offer by a long shot.

US wheat hasn't worked into the Middle East and North Africa since the Black Sea began stepping up their marketing efforts months ago.

The harvest for the largest Black Sea farm region, Krasnodar, is now complete and production was reported to be twice as large as last year according to the agriculture of ministry.

The flood of new crop wheat to the port has softened export offers and domestic prices over the last 2 weeks. Wheat production prospects in France and Germany remain positive as well but Great Britain continues to struggle with supply following their poor 12/13 harvest.

Imports into Great Britain were estimated at almost 300,000 tonnes in May, up from 255,785 the prior month and are running at more than triple last season's pace. Germany is estimated to be the top supplier to Great Britain.

September Oats closed up 1 at 354 1/4. This was 1 1/4 up from the low and 3 3/4 off the high.

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