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CME: Corn Futures Closed Lower Tuesday

27 November 2013

US - December Corn finished down 6 1/4 at 418 1/2, 6 1/2 off the high and 2 3/4 up from the low. March Corn closed down 6 1/2 at 424 3/4. This was 2 1/2 up from the low and 6 3/4 off the high.

March corn closed 6 1/2 lower on the session which was up 2 1/2 cents from the mid-session lows.

The market pushed moderately lower overnight and has had a difficult time in recovering the losses. Open interest was down 35,485 contracts yesterday and a similar amount the previous day as traders rolled to other months or just liquidated December option positioning.

The sharp drop in open interest was seen as a bearish signal with traders believing that a good portion of the short-covering may be behind. Weekly export sales news will be released on Friday ahead of opening.

Outside market forces are positive but focus in corn market is on hefty supply and ideas that the USDA will raise production forecast again now that harvest is near complete.

South America weather remains favorable which may have added to the bearish tone. There was some talk that another China cargo may have been detected to contain non-approved GMO substance but this was not confirmed.

January Rice finished down 0.065 at 15.74, equal to the high and equal to the low.

Soy Futures Closed Unchanged

January Soybeans finished unchanged at 1329 1/4, 1 1/2 off the high and 12 1/2 up from the low. March Soybeans closed down 2 3/4 at 1312. This was 11 up from the low and 2 3/4 off the high.

December Soymeal closed up 13 at 450.2. This was 16.1 up from the low and 3.8 off the high.

December Soybean Oil finished down 0.31 at 40.35, 0.44 off the high and 0.11 up from the low.

January soybeans closed unchanged on the session and up 12 1/2 cents from the lows. December meal surged higher for each of the past three trading sessions to a contract high ahead of the delivery period.

December meal is up 12.2% since Thursday. Meal spreads were also strong as traders see a lack of deliveries and the need to see a jump in crush to meet meal sales on the books. Talk of a lack of deliveries for first notice day on Friday added to the bullish tone. US exporters reported a sale of 360,000 tonnes of US soybeans to unknown destination.

Exporters also reported that 300,000 tonnes of US soybeans previously sold to China were cancelled.

The cancellation has traders nervous that China has over-booked soybeans for delivery early next year and if possible, will cancel more sales made with the US "if" South America soybean values continue to slide.

Weather remains favorable to one of the better starts to the growing year for Brazil and Argentina. The outlook for a record crop in Brazil and ideas that the USDA attache was 4 million tonnes higher in their Argentina production estimate than the official USDA numbers helped to May soybeans down 3 1/4 cents into the close.

January oil closed 35 lower on the session and down for the third day in a row and has given back nearly all of the surge higher from Thursday.

Wheat Futures Closed Lower

December Wheat finished down 6 at 646 1/2, 7 off the high and 1/2 up from the low. March Wheat closed down 3 1/4 at 656. This was 2 3/4 up from the low and 4 3/4 off the high.

March wheat closed 3 1/4 cents lower on the session and managed to bounce near 3 cents up from the lows.

The market came to just 1 1/4 cents from the November lows before the bounce. Overnight weakness in corn and early weakness in soybeans helped to pressure the market. Jordan is tendering to buy 100,000 tonnes of wheat from any origin.

Indonesia is expected to import 6.5 million tonnes of wheat this year which is down 7% from earlier expectations as weakness in the currency has hurt demand. The lower trade in the US dollar and firm trade in some commodity markets failed to provide support to the wheat market today and lower trade in the other grains helped to pressure.

The Russia grain harvest is said to be showing higher than expected yields this year with wheat harvest to date at 54 million tonnes as compared with 39.7 million last year by this date. March KC wheat was also down sharply at 6 1/4 cents lower.

Ideas that the crop has gone into dormancy in very good shape helped to pressure. While down slightly from the previous week at 62% good to excellent, the reading compares with 33% good/excellent last year. After the close, Egypt tendered for optional origin wheat.

December Oats closed up 2 3/4 at 384. This was 4 up from the low and 6 off the high.


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