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CME: Corn Futures Closed Lower Tuesday

18 September 2013

US - December Corn finished down 2 1/2 at 454, 14 1/2 off the high and 3/4 up from the low. March Corn closed down 2 1/2 at 466 1/2. This was 3/4 up from the low and 14 off the high.

The corn market probed higher at midsession after the FSA released updated preventative planted acreage for the month of September but the buying momentum ran dry and the market ended lower on the day.

December corn surged double digits on the open but quickly found spec and hedge selling resistance following the September FSA data which indicated that 3.572 million acres went to prevent plant, up 161,611 from August.

Prevent plant only showed a modest increase which was expected but the acreage reported planted and failed surged to 91.428 million, up from 88.771 in August and this is compared to the current USDA forecast of 97.4 million.

The market has been expecting a decline in planted acreage for months due to the wet planting season but the USDA has failed to adjust this lower in the last couple reports.

Traders see an acreage decline coming in the October report but long term, demand remains the bigger issue.

If planted acreage were to decline by 2.4 million acres to 95 million, yield was left unchanged at 155.3 bushels per acre, feed demand down 100 million, and export demand down another 100 million, the 13/14 carryout would be near 1.715 billion.

These adjustments may or may not happen but the USDA has plenty of wiggle room to keep the balance sheet stable since we are so early in the crop year. Demand revisions will be made throughout the marketing year as the trade sees more data.

November Rice finished down 0.035 at 15.53, 0.06 off the high and 0.03 up from the low.

Soy Futures Closed Lower

November Soybeans finished down 5 3/4 at 1342 1/2, 24 off the high and 10 1/2 up from the low. January Soybeans closed down 5 1/4 at 1343. This was 11 up from the low and 22 off the high.

December Soymeal closed down 1.9 at 426.6. This was 3.6 up from the low and 9.5 off the high.

December Soybean Oil finished down 0.13 at 42.24, 0.46 off the high and 0.19 up from the low.

Supportive FSA acreage data had the soybean market well supported this morning but by midday sellers came back in following the lower day of trade yesterday and November soybeans traded down on the day.

The November 13 vs. November 14 spread corrected lower for the second day in a row and made a new low for the move. The July/November also finished lower on the day.

Crop condition ratings continue to send a bullish tone into the market although the data suggested the rainfall over the last week stabilized and in some cases improved crop conditions. Yield remains the primary concern for the market with fears that the national average yield will dip down to 12/13 levels.

The September FSA data indicated that 1.687 million acres went to prevent plant, up from 1.618 in August. Prevent plant only shows a modest increase which was expected but the acreage reported planted and failed surged to 74.659 million, up from 72.061 in August.

The USDA estimated planted acreage is at 77.2 million acres. The cash market had a firm tone midday with CIF up a tad on tight supplies and a slowdown in farmer sales.

Wheat Futures Closed Higher

December Wheat finished up 1 3/4 at 643, 9 off the high and 1 3/4 up from the low. March Wheat closed up 1 1/2 at 653 1/2. This was 2 up from the low and 8 3/4 off the high.

Wheat futures traded higher into the closing bell but finished well within their recent range of valuation. Early support stemmed from slightly supportive FSA preventative planted acreage data for the corn market.

Paris wheat gained overnight on technical buying and support from the US market. Bearish supply forces remain prevalent with aggressive Black Sea wheat offers in the export market that have undercut French and German export sales expansion.

Farmers in Russia have begun to plant their 14/15 crop with favorable soil moisture levels due to near average rainfall for the month of August. Sowings for next year are estimated at 5.3 million hectares compared to 7.1 million in the same period a year ago.

This accounts for 32.2% of the estimated planted hectares. Farmers have also harvested 44.4 million tonnes of wheat as of September 16th according to the Russian Ag Min. US wheat remains a premium to other world origins which could limit export sales expansion in the second half of the crop year.

US Chicago wheat cargos FOB the US Gulf were last indicated around $270.50 per tonne while Black Sea is near $247-250 per tonne. Egypt has been a buyer of wheat between $250-$255 over the last 2 weeks.

December Oats closed down 4 3/4 at 306 3/4. This was 2 1/4 up from the low and 9 1/4 off the high.

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