The market had a barrage of supportive fundamental headlines to trade off of today which helped to spark a double digit move higher for July and December corn.
The USDA announced this morning that US private exporters sold a total of 540,000 tonnes of corn to China and to unknown destinations for the 2013/14 marketing year.
The sales included 360,000 tonnes for China and 180,000 tonnes for an unknown destination. China has been an active buyer as corn prices have moved lower in an effort to rebuild domestic reserves and due to firm domestic corn prices.
Old crop corn found support from positive ethanol production data this morning. Ethanol production for the week ending May 17th averaged 875,000 barrels per day, up 2.1% vs. last week and down 4.8% vs. last year.
This was the highest weekly production estimate since June 22, 2012. Total ethanol production for the week was 6.13 million barrels. Corn used in last week's production was estimated at 91.9 million bushels.
This crop year's cumulative corn used for ethanol production is 3.2 billion bushels. Corn use needs to average 94.42 million bushels per week to meet this crop year's USDA estimate of 4.6 billion bushels. Stocks as of May 17th were 16.18 million barrels, down 1.5% vs. last week and down 24.5% vs. last year.
This is the lowest inventory level since November 5th, 2010. This was the 4th straight week with zero imports reported and implied demand fell to 6.37 million barrels, down only modestly from 6.42 the week prior.
July Rice finished up 0.16 at 15.34, 0.03 off the high and 0.165 up from the low.
Soy Futures Closed Higher
July Soybeans finished up 16 at 1494 1/4, 3/4 off the high and 23 3/4 up from the low. November Soybeans closed up 18 at 1238 3/4. This was 17 3/4 up from the low and 1 off the high.
July Soymeal closed up 1.9 at 440.6. This was 6.8 up from the low and 0.4 off the high.
July Soybean Oil finished up 0.16 at 49.64, 0.11 off the high and 0.25 up from the low.
The soybean market traded choppy and two-sided early on with profit taking in the July/November spread which helped November soybeans gain on the old crop contracts. Markets busted higher late in the session with the July and November contracts ending the day with double digit gains.
Meal offers were down overnight in various processor markets and this helped to pressure the soybean basis for the second day in a row. Some processors were reportedly quoting basis 20-30 cents per bushel lower than the day prior.
Farmer selling has picked up this week and more imports were rumored to be done between Brazil and the US which was seen as a negative factor for markets. CIF bids were down on the day as well.
Traders noted that farmer sales picked up in South America over the last week which has improved the supply pipelines for export and crush commitments.
Commodity market were also caught in the crosshairs of mixed rhetoric from the Federal Reserve Chairman that many suggested may have signaled a tapering of QE.
This sent the metals and energy markets lower but grain markets managed to find support on old crop supply tightness and strong old crop demand influences.
Wires reported midday that more than 50 cargo ships were delayed in the main port of Rosario due to a 3 day old strike by union port workers.
Wheat Futures Closed Higher
July Wheat finished up 8 at 688 1/2, 4 1/4 off the high and 8 1/2 up from the low. December Wheat closed up 7 at 710 1/2. This was 7 1/2 up from the low and 4 1/2 off the high.
Wheat futures traded sharply higher today led by gains in the Chicago market. KC July wheat lost to Chicago but still traded positive into the closing bell. Light profit taking took place in long KC vs. short Chicago wheat spreads.
Short covering in corn helped to lift wheat futures but fundamentally speaking, some traders suggest the weather patterns favor a bearish bias in the wheat market. The European Union, Black Sea, and parts of the western plains in the US will see scattered showers into this weekend.
The longer term forecast for the west remains mixed with low confidence in rainfall activity and temperatures are expected to rise. Australia saw beneficial rainfall this week which will help soil moisture conditions for newly planted wheat.
A private analyst estimated Australian wheat production for 2013/14 at 24.1 million tonnes, down from 24.3 previously. They also cut Ukraine production to 20.3 million tonnes, down from 21.9 previously.
The USDA is at 24.50 million and 22 million respectively. Wheat crops remain in relatively good shape in areas of Germany and France. June weather for the Northern Hemisphere will be ultimate factor for final yield.
Open export tenders included Iraq, Algeria, Jordan, and Tunisia issued a 67,000 tonne tender this afternoon.
July Oats closed up 11 1/2 at 366 1/2. This was 15 1/4 up from the low and equal to the high.
