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CME: Corn Futures Closed Higher Tuesday

02 November 2011

US - December corn closed moderately higher on the session after spending most of the session with sharp losses.

December Corn finished up 7 1/4 at 654 1/4, 6 off the high and 22 3/4 up from the low. March Corn closed up 6 1/4 at 665 1/4. This was 21 3/4 up from the low and 6 off the high.

Ideas that the market was oversold and concerns for a lower yield and tighter ending stocks for next week's production update plus a lack of new selling interest on the early break due to talk of the short-term oversold condition helped to support the strong gains late in the day.

The early selling pressures from fund traders and speculators drove the market down to the lowest level since October 18th before finding some support to bounce back up into the range.

A surge higher in the US dollar, weak economic news from China and a sharp break in energy and other commodity markets helped to pressure the market early.

Ideas that next weeks USDA update could show a lower yield plus a limit-up advance in cattle may have sparked some of the buying and short-covering seen late in the day.

Slow export news and talk that Japan and other normal importers of US corn are seeking alternative grains added to the negative tone this morning.

Wheat Futures Closed Slightly Higher

December Wheat finished up 1 3/4 at 630, 4 off the high and 18 up from the low. March Wheat closed up 1 1/4 at 665 3/4. This was 17 1/2 up from the low and 2 1/2 off the high.

December wheat closed 1 1/4 cents higher on the session which was up 18 cents from the early lows.

Kansas City and Minneapolis wheat closed lower as the turn up in corn and short-covering from fund traders late in Chicago helped to support the bounce.

The sharply higher US dollar with weakness in most commodity markets and a sharp break in global equity markets overnight helped to pressure the market early.

Greek news of a referendum on it's bailout plus poor economic news in China helped to pressure.

Egypt bought 180,000 tonnes of wheat from Russia and Ukraine with 60,000 to Ukraine paying $247.92 per tonne and 120,000 tonnes from Russia at $252.50 per tonne.

Sales were made at $247.92 and $249.30 per tonne on the weekend so the news was seen as slightly supportive and helped the market hold up better than other grains.

Soybean Futures Closed Moderately Lower

January Soybeans finished down 14 3/4 at 1202 1/2, 20 1/2 off the high and 12 1/2 up from the low. March Soybeans closed down 15 at 1212. This was 12 1/4 up from the low and 20 1/4 off the high.

December Soymeal closed down 5.4 at 310.7. This was 1.2 up from the low and 7.3 off the high.

December Soybean Oil finished down 0.37 at 50.8, 0.52 off the high and 0.85 up from the low.

January soybeans closed moderately lower on the session and saw the lowest close since October 10th. The market bounced off of the lows late in the day with a turn higher in corn and wheat but soybeans still closed near 15 cents lower on the day.

Continued concerns in Europe over debt issues plus poor economic news from China plus a continued surge higher in the US dollar helped to drive the market sharply lower early today and to the lowest level since October 11th.

China purchasing managers index was released overnight and suggested the slowest factory activity since February of 2009.

Slow demand from China for US soybeans plus hefty supply of South America soybeans which China buyers believe is of higher quality plus good weather in South America which has traders talking of larger crop estimates for the upcoming season are all factors which have added to the recent long liquidation selling trend from speculators.

Talk that the yield estimate from the USDA production report for next week could be revised higher added to the bearish tone.

Traders see a lower yield for corn and some corn/soybean spreading was noted which helped pressure soybeans.

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