December corn trade higher on the day and briefly traded above 750 shortly after open outcry began trading. Buying support was linked to a sharply higher wheat market as well as thoughts that Argentina corn production will be slashed due to heavy rainfall in October.
Exports remain sluggish for corn but this only makes up 10 per cent of the demand matrix. Demand for corn remains strong in feeder markets as wheat extends its premium to corn futures.
Basis bids at ethanol facilities are strong as well and ethanol production for the week ending November 2nd averaged 827,000 barrels per day which is up 0.25 per cent vs. last week and down 9.2 per cent vs. last year.
On top of the better production, ethanol stocks were drawn down which could imply a significant improvement in overall ethanol demand.
Total ethanol production for the week was 5.79 million barrels which was up from 5.77 the week prior. Corn used in last week's production is estimated at 86.8 million bushels which was up from last week.
This crop year's cumulative corn used for ethanol production for this crop year is 765.9 million bushels. Corn use needs to average 86.5 million bushels per week to meet this crop year's USDA estimate of 4.5 billion bushels.
November Rice finished down 0.1 at 14.935, equal to the high and equal to the low.
Soy Futures Closed Lower
November Soybeans finished down 8 at 1508 3/4, 14 off the high and 8 1/2 up from the low. January Soybeans closed down 8 1/2 at 1507. This was 9 3/4 up from the low and 14 3/4 off the high.
December Soymeal closed down 3.2 at 469.5. This was 4.3 up from the low and 5.9 off the high.
December Soybean Oil finished down 0.06 at 48.62, 0.44 off the high and 0.21 up from the low.
January soybeans finished the day lower but off session lows and above $15.00. Technical selling as well as a stronger US Dollar offered resistance to prices. Outside markets were sharply lower with the Dow Jones down over 200 points.
Concerns that no agreement will be made on the fiscal cliff and uncertainly over the path of the global economy pushed investors to the sidelines and towards safe havens like the US Dollar.
Underlying support is coming from strong export demand from China and a tight global supply outlook if South America fails to produce a bumper crop this year.
Weather has turned more favorable in South America this week. Argentina is expected to dry down before seeing another chance for rainfall this weekend.
Central and northern Brazil is expected to see rainfall this week which should relieve soil moisture deficits. Additional pressure was linked to thoughts that the USDA will raise the US average soybean yield and production estimate in this Friday's USDA report.
Wheat Futures Closed Higher
December Wheat finished up 17 at 894, 3 off the high and 23 1/4 up from the low. March Wheat closed up 17 1/4 at 907 3/4. This was 23 1/2 up from the low and 3 off the high.
December Chicago wheat surged to its highest level since October 1st and finished the day with double digit gains. KC and Minneapolis wheat traded higher as well.
Poor growing conditions in the western plains, short covering ahead of Friday's USDA report, and new contract highs in the Paris Wheat futures market overnight prompted a massive round of buying shortly after the open outcry open.
Outside markets negatively following the reelection of the President but fears of a Greek default on debt as well as concern over the US fiscal cliff added to the negative tone and pushed the US Dollar higher on the day.
The strong dollar and weak soybean market offered resistance to gains but many in the market also feel the USDA report this Friday could be supportive to the market.
Some feel global wheat ending stocks will fall near 170 million tonnes vs. current estimates of 173 million tonnes. Traders will also watch for cuts to Argentina and Australian wheat production.
December Oats closed up 5 1/4 at 365 1/4. This was 9 3/4 up from the low and 1/2 off the high.
