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CME: Corn Futures Closed Slightly Higher Friday

29 October 2011

US - December corn closed 3 1/2 cents higher on the session for the highest close since September 21st. The market gained 5 3/4 cents for the week.

December Corn finished up 3 1/2 at 655, 2 off the high and 9 3/4 up from the low. March Corn closed up 3 1/2 at 667. This was 9 1/2 up from the low and 1 1/4 off the high.

Early weakness was led by a correction from the surge higher yesterday, weakness in energy and equity markets and more stories of traditional corn buyers (Taiwan and Japan) seeking alternative feeds. However, commercial buying emerged to provide support on the early set-back and there was a noted trend of corn/soybean spreading which add to the buying support.

Traders see the potential for tightening ending stocks for the November 9th USDA update and also a possible revision higher in exports due to much higher import demand from China than was previously expected. Both of these factors could tighten the ending stocks outlook.

Ukraine's Farm Minister raised their grain harvest forecast to 54 million tonnes from 53 million previous.

Corn exports are expected at 13 million tonnes.

Wheat Futures Closed Mostly Unchanged

December Wheat finished up 1/2 at 644 1/2, 8 1/4 off the high and 8 1/4 up from the low. March Wheat closed up 3/4 at 680 1/2. This was 8 1/2 up from the low and 8 off the high.

December wheat closed up 1/4 of a cent on the session today and up 12 1/2 cents for the week.

A negative tilt to outside market forces helped to spark the early setback but buying emerged to support corn and wheat as traders were buying the grains and selling soybeans on a spread.

A bounce in corn and some noted short-covering helped push the market to the highest level since October 12th.

Ukraine's Farm Minister raised their grain harvest forecast for the 2011/12 season to 54 million tonnes from 53 million previous. Ukraine is expected to export 11 million tonnes.

FSU-12 exports for the 2011/12 season are projected at 34.7 million tonnes from 14.1 million last year. However, the new crop winter wheat outlook continues to deteriorate due to drought. Recently planted winter crops in Ukraine have seen the crops rated poor jump to 39% as of October 27th from 29% previous.

European wheat futures inched higher into the close to provide some support as well.

Soybean Futures Closed Sharply Lower

November Soybeans finished down 18 at 1217, 24 3/4 off the high and 1 3/4 up from the low. January Soybeans closed down 18 at 1226. This was 2 up from the low and 25 off the high.

December Soymeal closed down 6 at 317.5. This was 0.9 up from the low and 7.1 off the high.

December Soybean Oil finished down 0.34 at 51.77, 0.57 off the high and 0.41 up from the low.

While the grain markets inched higher, November soybeans closed 18 cents lower on the session which left the market up 4 3/4 cents for the week.

A bounce in the US dollar and weakness in energy and gold left a bearish tilt to the market with choppy and mostly lower trade early and then a minor bounce off of the late lows.

Set-backs in outside markets, however were shallow relative to yesterday's action and a bounce in the stock market and stronger trade in corn helped to support the market off of the early lows but funds were sellers late in the day.

Monday is first notice day for November soybeans.

Trade focus may also shift next week to the November 9th production report from the USDA. There is a general sense that demand factors will be revised lower due to the weak pace of export sales so far and some traders see a slightly higher yield.

The slow pace of exports and favorable weather in South America were seen as negative forces today.

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