US MIDDAY: corn sags

US corn futures declined on Wednesday as traders booked profits after a two-week high in the previous session and braced for a possible reduction in the US government's 2014 quota of corn-based ethanol fuel used in gasoline. Soyabean futures firmed in choppy technical trade while wheat ended a tick higher on short-covering after closing lower in each of the previous seven sessions.
At the Chicago Board of Trade, December corn settled down 2-1/2 cents at $4.29-3/4 per bushel. January soyabeans ended 1/2 cent higher at $13.15 a bushel and December wheat settled up 1/4 cent at $6.45-1/2 a bushel. Corn sagged on technical moves and worries that the US Environmental Protection Agency would soon revise its Renewable Fuel Standard, or RFS, by lowering the amount of corn-based ethanol required in 2014 for blending into gasoline.
Documents leaked earlier this year indicated the government might lower its corn-based ethanol requirement to 13 billion gallons, versus the 14.4 billion called for in the 2007 RFS law. "It's an uncertainty, and the bottom line is they are going to reduce," said Mark Schultz, analyst with Northstar Commodity in Minneapolis. "But if it stays at 13 billion (gallons), it's not super-negative," he added.
Even with a lower mandate, US ethanol production could reach 14 billion gallons in 2014 because of positive margins for processors and demand from buyers, Archer Daniels Midland Co's chief executive said. The corn market was seeking new direction after recent price rallies after a major US Department of Agriculture report on Friday. The USDA forecast a record US corn crop, but its projection of 2013/14 ending stocks fell below market expectations.
The US corn harvest was 84 percent complete by Sunday, ahead of the five-year average of 79 percent, the USDA said in a weekly report. However, high levels of kernel moisture were a concern in Iowa, Nebraska, Wisconsin and other states, slowing progress. The US soyabean harvest was 91 percent finished, roughly in line with the five-year average of 92 percent. Soyabeans ended higher after spending much of the session in negative territory. But the benchmark January contract stayed inside of the previous day's trading range and below Tuesday's six-week top of $13.19-3/4. December soyameal settled down $4.40, or 1 percent, at $423.30 per short ton, dropping from a near two-month high set Tuesday, but strong domestic and export demand for US meal underpinned values.