Closing Grains Commentary

2012-11-14T16:34:00Z 2012-11-14T16:48:20Z Closing Grains CommentaryCME Group and Brugler Marketing Midwest Producer
November 14, 2012 4:34 pm  • 

Corn finished up today on the strength of the soybean market and rumored sales. Soybeans saw steady trade and a steady stream of positive news: NOPA crush numbers above market expectations and big exports to China.

CORN: December Corn finished up 2 1/4 at 725 3/4, 3 1/2 off the high and 5 1/2 up from the low, the CME Group reported Wednesday afternoon. March Corn closed up 3 at 729 1/4. This was 7 up from the low and 2 1/4 off the high.

The corn market saw modest gains on the day seeing support from a stronger soybean market and on rumors that a significant amount of corn may have been sold to Mexico, although no confirmation was made of the trade, according to the CME. Basis in the Gulf of Mexico was steady to firm midday as traders attempt to source corn prior to an expected closure of a portion of the Mississippi River in early December.

The US continues to see pressure from a strong shipment pace in South America that many feel will deteriorate as we draw closer to 2013 as they ship more corn into Europe. A French farm office cut its 2012/13 ending stocks for corn to 1.9 million tonnes vs. 2 last month and this is down 17% from last year, the CME said. The slow shipment pace of corn by US exporters so far this year continues to favor the bear camp in the short term along with a dry weather pattern in Argentina this week. Rains are expected to return to Argentina early next week which could be supportive to the price outlook.

SOYBEANS: November Soybeans finished unchanged at 1432 3/4, 12 1/2 off the high and 5 up from the low, the CME Group reported. January Soybeans closed up 11 at 1419. This was 11 3/4 up from the low and 9 1/2 off the high.

December Soymeal closed up 2.9 at 436.0. This was 2.9 up from the low and 4.7 off the high, according to the CME. December Soybean Oil finished up 0.65 at 47.67, 0.5 off the high and 0.64 up from the low.

January soybeans traded higher on the day after a positive overnight session and positive demand data was released. Outside markets drifted lower midday as traders feared indecision in Congress over the fiscal cliff, the CME said. Demand side news was supportive to the bull camp this morning with NOPA crush pegged at 153.54 million bushels vs. 119.73 in September. This was well above market expectations near 147.7 million bushels and some estimates were as high as 155 million bushels.

The USDA also announced that private US exporters sold 120,000 tons of soybeans to China for the 2012/13 crop year. US exporters also sold 40,000 tons of soybean oil to an unknown destination for the same crop year. Demand remains strong in the soybean market but the increases in US production in the most recent USDA report and negative technical signals continues to limit gains, according to the CME. The weekly Soybean Harvest report showed 96% of the harvest was complete compared to 93% last week and 95% last year.

WHEAT: December Wheat finished down 2 1/4 at 848 3/4, 9 1/4 off the high and 3 1/2 up from the low. March Wheat closed down 1 3/4 at 864, the CME reported. This was 3 1/2 up from the low and 8 3/4 off the high.

December Chicago wheat ended the day with modest losses on negative demand data and profit taking. Overnight gains were linked to crop conditions ratings that were reported below market expectations, according to the CME. The Weekly Winter Wheat Conditions report showed 36% of the crop was rated good/excellent compared to 39% last week and 50% last year. This was a new low for this time of year, beating the prior record low rating of 43% in 1991.

Poor/very poor conditions jumped from 19% last week to 22% this week and against year ago levels of 14%. The worst ratings continue to be centered in the northwestern parts of the growing region. South Dakota is rated 53% poor/very poor, 3% good, and no excellent rating was listed. Additionally, it was reported that Jordan and Syria bought wheat overnight and the origin was thought to be in the Black Sea, the CME Group reported. Wheat continues to miss out on significant amounts of export business which is a short term negative to price direction.

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