Corn, Wheat, Soybean Complex Market Commentary for 5/25/2010
Corn Recap
July Corn closed down 6 3/4 at 364 1/4, 6 off the high and 1 3/4 up from the low. December Corn finished down 6 1/4 at 382 3/4. This was 2 1/2 up from the low and 5 3/4 off the high.
The corn, soyben and wheat markets moved largely in tandem today starting with weakness overnight and further selling to start the day session. This was followed by modest firming into mid session and a setback to near the middle third of the day’s trading range into the close. We have apparently seen the first example of the potential for disruption of shipping into the Gulf after an oil-stained tanker was detained upon entering the Mississippi River. No word yet as to what the cleanliness standards will be as more and more ships are forced to sail through contaminated waters before entering Gulf ports. Traders said that the sharp rise in the dollar and sharply lower crude oil and equity markets contributed to today’s weakness in corn. Forecasts of cooler weather across much of the Corn Belt, starting this weekend, and the possibility of scattered light rains across major growing areas during the first half of next week added to the negative tone. Some longer term forecasts call for moderate to heavy rains to move into the western and NW Corn Belt by Thursday of next week followed by more moderate totals in the central and SW Corn Belt into the end of next week. China’s latest weekly auction of corn reserves resulted in the sale of 939,600 tonnes out a total of 993,300 tonnes that were offered.
Wheat Commentary
July Wheat finished down 7 at 460 1/2, 6 1/4 off the high and 4 1/4 up from the low. December Wheat closed down 7 3/4 at 508 3/4. This was 3 3/4 up from the low and 6 3/4 off the high.
The July wheat contract moved lower overnight and then made a new contract low to start the day session. The market firmed into mid session with further gains extending into early afternoon. However, the July contract failed to reach yesterday’s close on the rally and the day culminated with a sharp sell off into the lower half of the day’s trading range. Today’s close marked a new contract low close for the July wheat contract. The hard red winter wheat harvest is underway in the southern Plains with harvest expected to reach the Northern High Plains of Texas in the next couple of weeks. Some areas in the Southern Low Plains of Texas were damaged by hail from recent thunderstorms. South Korea is looking to buy 45,000 to 55,000 tonnes of feed wheat. Tunisia is tendering to buy 100,000 tonnes of soft wheat with the sale expected to go to France. They are also looking to buy 25,000 tonnes of durum wheat.
Soybeans Recap
July Soybeans finished down 10 at 930 1/2, 10 1/2 off the high and 3 up from the low. November Soybeans closed down 12 1/2 at 903. This was 3 up from the low and 12 1/2 off the high.
Soybeans traded lower throughout the day today against a backdrop of sharply lower crude oil and equities and a sharply higher dollar. Favorable crop weather also added to the negative tone. The July soybean contract attempted a mid-session rally, but this fell short of yesterday’s close and the market finished near the middle third of the day’s trading range. New crop November and December contracts and lost to the old crop July contracts in both the soybean and meal markets. The Gulf (export) market continues to see background support from expectations that rising prices in Brazil and Argentina will result in further shifting of export business from South America to the US. Light farmer selling is also helping to support cash markets in the US. However, favorable crop weather in the US is reinforcing ideas that this year’s US soybean yields could be higher than the USDA’s current projection of 42.9 bushels per acre. Last year’s US soybean yield was 44.0 bushels per acre under, cool, wet and nearly ideal conditions. One analyst noted that the cooler forecast for the coming weekend and into next week and the possibility of improved rainfall later next week was particularly favorable in that it would keep the current hot and relatively dry spell from lasting long enough to cause stress to recently planted soybean fields.
July Soymeal closed down 2.6 at 271.1. This was 1.1 up from the low and 3.3 off the high.
July Soybean Oil finished down 0.35 at 37.17, 0.32 off the high and 0.35 up from the low.
July Oats closed down 7 1/2 at 191 1/2. This was equal to the low and 9 off the high.
July Rice finished down 0.45 at 11.62, 0.03 off the high and 0.04 up from the low.
The daily commentaries provide a recap of any reports released that day, a recap of each commodity’s traded price activity, an analysis of the factors that influenced price activity, and a look ahead at the next day’s schedule. CME Group provides market commentaries for soybeans, corn, wheat, gold and silver.
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Andy Waldock circulates this blog. Andy Waldock is a broker, asset manager, trader, and analyst. For that reason, Andy Waldock may have positions for himself, his clients, or his relatives in any market discussed. The blog is meant to develop a dialogue and educate those with an interest in the commodity markets. The commodity markets employ a high degree of leverage and may not be advisable for all investors. There is considerable risk in investing in futures.
Category: From the Editor
