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Exports trip up corn, wheat futures

11/29/2012 @ 3:13pm

U.S. corn and wheat futures settled lower Thursday amid renewed worries about sluggish export demand.

The drop came after the U.S. Department of Agriculture said net export sales of corn and wheat in the week through Nov. 22 were below the level analysts had expected.

March wheat futures ended down 5 3/4 cents, or 0.6%, to $8.85 1/2 a bushel at the Chicago Board of Trade. Kansas City Board of Trade March wheat dropped 1 1/4 cents, or 0.1%, to $9.35 a bushel. MGEX March wheat finished down 1 1/2 cents, or 0.2%, at $9.51 1/4 a bushel.

CBOT March corn finished down 5 1/4 cents, or 0.7%, to $7.58 3/4.



The lower weekly export sales data raised fresh concerns among traders about demand for U.S. grains, particularly after prices had rallied over the past week.

Traders are starting to weigh the prospect for increased domestic corn supplies, as lagging demand from ethanol processors and grain exporters frees up inventories, said Sterling Smith, a futures specialist with Citigroup Inc. in Chicago.

Meanwhile, traders said worries about how Washington will address the "fiscal cliff" are hanging over the market, though the issues don't directly affect grains and oilseeds, and that the prospect of volatile markets in the next few weeks is discouraging some buyers.

Some traders are booking profits before any potential increase in federal taxes can take hold before year's end, Mr. Smith said.

U.S. soybean futures finished higher Thursday, but well off early advances. Gains were pared by profit taking by speculators.

Traders have boosted soybean prices lately, but without a legitimate weather threat in South America, it is hard to sustain upward price movement, said Arlan Suderman, an analyst with advisory firm Water Street Solutions in Wichita, Kan.

It is pretty early to base a rally on South American weather, Mr. Suderman said, "particularly with a lot of uncertainty surrounding the fiscal cliff for investors."

Still, soybeans remained underpinned by stout domestic and export demand. Bullish traders were encouraged Thursday by weekly export sales data that showed that sales for soymeal and soyoil were stellar, though sales of soybeans fell shy of analyst forecasts.

The bottom line is soy demand has proved to be inelastic to rising prices this year, analysts said.

Chicago Board of Trade soybeans for January delivery finished up 1 3/4 cents, or 0.1%, at $14.48.


Write to Andrew Johnson Jr. at andrew.johnsonjr@dowjones.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
November 29, 2012 15:57 ET (20:57 GMT)
DJ U.S. GRAIN AND SOY REVIEW: Corn, Wheat Drop on Poor Exports->copyright


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