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CME: Corn Futures Closed Higher Wednesday

15 August 2013

US - December Corn finished up 8 at 455 1/4, 3/4 off the high and 8 3/4 up from the low. March Corn closed up 7 1/2 at 468 1/4. This was 8 1/4 up from the low and 3/4 off the high.

Corn futures traded higher on the day, led by gains in the September contract as bids crept higher in the ethanol and CIF markets.

The Sept/Dec spread edged higher on talk that a tropical storm or hurricane in the Atlantic could shift east and head north into the Gulf of Mexico.

If this occurred, the heavy rainfall in the region may delay harvest progress and push more demand into the old crop marketing year. Ethanol production for the week ending August 9th averaged 857,000 barrels per day, up 0.50% vs. last week and up 4.6% vs. last year. Total production for the week was 6 million barrels.

Corn used in last week's production was estimated at 90 million bushels and cumulative usage for this crop year is 4.3 billion bushels.

Corn use needs to average 107.3 million bushels per week to meet this crop year's USDA estimate of 4.6 billion bushels. Stocks were estimated at 16.4 million barrels, down 1.75% vs. last week and down 11% vs. last year.

The data implies that ethanol demand for the old crop marketing year may decline on futures USDA reports which could increase the carry-in estimate for the 13/14 marketing year.

The RIN market was bid higher following the report and crude/gas was higher on the day. There was also talk of the September weather models trending cooler than prior maps which prompted more talk in the trade about an early frost/freeze.

November Rice finished up 0.175 at 15.4, equal to the high and equal to the low.

Soy Futures Closed Higher

November Soybeans finished up 11 1/4 at 1239, 1 off the high and 26 up from the low. January Soybeans closed up 10 3/4 at 1243 1/4. This was 25 1/4 up from the low and 1 off the high.

December Soymeal closed up 6.3 at 379.1. This was 12.5 up from the low and 0.3 off the high.

December Soybean Oil finished down 0.32 at 42.63, 0.47 off the high and 0.09 up from the low.

Soybean futures traded higher on the day after briefly probing into negative territory overnight and early this morning. Spreads were steady to higher with CIF bids edging up for nearby shipment. Meal traded higher while oil finished lower on the day.

Temperatures were not ideal for crop development overnight with lows in the mid-40's and low 50's for major growing regions.

Temperature profiles will ratchet higher into the weekend and next week. The 7-10 rainfall forecast is rather quiet for the central Midwest although some areas of eastern NE and western IA may see light accumulation.

Traders still question the cut to US export demand by the USDA on Monday given that year-to-date sales up to this point in the 2013/14 crop year exceed year ago levels and even the 5 year average sales pace.

The USDA reported that US private exporters sold 110,000 tonnes of 2013/14 soybeans to China overnight. Record production expectations out of Brazil and Argentina next year seem to be the offset at the moment.

September is set to be a tight supply period for the world soybean market due to US harvest delays and the Brazilian export program is beginning put more emphasis on their second corn crop. Next year's Brazilian soybean harvest will begin in April and May.

The trade is gearing up for the July NOPA crush report tomorrow where many see it coming in near the June print of just over 119 million bushels. Soybean oil stocks are expected to decline by a modest about but hold above year ago levels.

Wheat Futures Closed Higher

December Wheat finished up 1 1/4 at 642 3/4, 1 3/4 off the high and 7 1/4 up from the low. March Wheat closed unchanged at 655 1/2. This was 6 1/2 up from the low and 2 off the high.

Wheat futures struggled to find bullish momentum today with new lows for the move posted in the KC and Chicago December contracts early in the session. Wheat vs. corn spreads continued their correction to the downside.

Calendar spreads in Chicago and KC wheat inched in which is supportive although the flat price market continues to be hit with fund selling. The firm spread trade throughout the session helped to push front month contracts into the green at the close.

Paris wheat futures tracked Chicago overnight and dropped 1-2 euros per tonne on favorable weather and production prospects for the French and German crops. A Berlin based agency raised their grain harvest forecast for this crop year to 47 million tonnes, up from 46.3 million.

Wheat production is expected to climb to 24 million tonnes, up 12.2% from the prior year. Favorable rainfall patterns continue to spread throughout central NE, KS, and OK which will help to improve planting conditions for next year's crop.

With ending stocks in the KC market sitting at a 6-year low, a strong production rebound will be needed next year. Clashes broke out in Egypt again which could result in pressure on world wheat prices on thoughts they may not issue a tender until tensions ease.

December Oats closed up 1 1/4 at 328 1/2. This was 1 up from the low and 1 off the high.

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