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CME: Corn Futures Closed Higher Wednesday

12 December 2013

US - March Corn finished up 3 1/4 at 439 1/4, 1/2 off the high and 5 up from the low. May Corn closed up 3 1/4 at 447 3/4. This was 5 up from the low and 1/2 off the high.

March corn closed 3 1/4 cents higher on the session with an inside trading session. December 14 corn was up 2 1/4.

The market saw choppy, two-sided trade overnight but news that 120,000 tonnes of US corn was sold to unknown destination helped to provide underlying support.

While the USDA raised demand factors by 100 million bushels yesterday, there are many traders who see 140 to 310 million bushel "increase" in production for the January update and we have seen estimates as high as 400 million bushels.

Bears see normal weather next year plus the outlook for a small decline in acres should leave the trade talking about 2.5 to 3.0 billion bushel carryout for the 2014/15 crop season.

If we assume 92 million acres planted and a 165 yield, ending stocks would come in near 2.618 billion bushels with a stocks/usage of 19.9%.

This would be a 22 year high. Ethanol production for the week ending December 6th averaged 944,000 barrels per day.

This is up 3.4% vs. last week and up 14.56% vs. last year. Total Ethanol production for the week was 6.608 million barrels which is the highest weekly total since December 30th of 2011. Corn used in last week's production is estimated at 99.12 million bushels.

This crop year's cumulative corn used for ethanol production for this crop year is 1.3 billion bushels.

Corn use needs to average 94.2 million bushels per week to meet this crop year's USDA estimate. Stocks were 15.448 million barrels. This is up 2.14% vs. last week and down 22.8% vs. last year.

January Rice finished down 0.085 at 15.475, equal to the high and equal to the low.

Soy Futures Closed Higher

January Soybeans finished up 5 3/4 at 1344, 1 1/2 off the high and 9 1/2 up from the low. March Soybeans closed up 6 1/2 at 1328 1/2. This was 10 1/4 up from the low and 1 1/2 off the high.

January Soymeal closed up 0.6 at 438.9. This was 2.5 up from the low and 1.9 off the high.

January Soybean Oil finished up 0.29 at 40.4, 0.16 off the high and 0.28 up from the low.

March soybeans closed 6 1/2 cents higher on the day with March meal up $1.70 and March oil up 29.

The market saw choppy and two-sided trade early and was trading up 3 1/2 cents into the mid-session.

The meal market is also seeing short-term choppy trade with an inside day after the challenge of the September highs yesterday and weak close. The upside may have been limited by weaker basis levels with talk at elevators of increased producer selling over the past few days.

Traders see solid upfront demand for crush and export, good international crush margins and tight producer holding as short-term positive forces.

Weather in South America, the outlook from many traders for 90-91 million tonnes out of Brazil (not 88 from the USDA yesterday) and the outlook for Argentina production near 57 million tonnes (not 54.5 from the USDA) are seen as potential negative forces ahead.

Some traders also fear an adjustment higher in yield and production for the January USDA update for the US crop. Fears that speculators might reduce their net long position as we get closer to the holidays is also seen as a potential negative factor.

Wheat Futures Closed Higher

March Wheat finished up 2 at 640 3/4, 2 3/4 off the high and 5 1/2 up from the low. July Wheat closed up 4 1/4 at 646 1/2. This was 6 up from the low and 1 off the high.

While December wheat managed to drive lower to yet another new contract low today, March wheat managed to hold just above yesterday's lows and grinded higher to close 2 cents higher on the day.

December closed higher after the new contract low which adds some technical support to the market; especially with funds likely holding a record net short position. Traders indicated that bargain hunting was a factor.

The market is oversold and there is also plenty of talk that US wheat is now competitive on the world market. News that the US was not involved in the Egypt snap tender overnight helped to keep sellers active early.

Egypt bought 300,000 tonnes of wheat from Romania and France. March wheat traded as much as 4 3/4 cents higher on the day overnight do to talk of the oversold condition of the market after the contract lows posted yesterday.

March KC wheat closed 1/2 cent higher with an inside trading day. March Minneapolis wheat closed 1/2 cent higher.

March Oats closed up 9 at 345. This was 11 1/2 up from the low and 2 1/2 off the high.

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