Market News

A strong day for beans, corn and wheat: August 3, 2009

Soybeans were sharply higher on speculative and technical buying, along with spillover from the outside markets. The dollar index was lower while the Dow Jones Industrial Average and crude oil were higher. Unknown destinations bought 116,000 tons of 2009/10 U.S. beans ahead of the open and there’s a warmer weather pattern on tap for the Midwest. Also, the fundamentals remain supportive, particularly for old crop. Doane has the crop at 3.225 billion bushels with an average yield of 42.0 bushels per acre and FC Stone sees beans at 3.247 billion with an average yield of 42.4 bushels per acre. The USDA’s next update is due out August 12. The USDA reports that 76% of soybeans are blooming, compared to 86% for the five year average with 36% setting pods, compared to 54% on average and 67% of beans in good to excellent condition, steady with a week ago. Soybean meal and oil followed beans higher. Gains in meal were limited by product spread trade.

Corn was sharply higher on fund and technical buying, in addition to spillover from beans and the outside markets. Corn’s also keeping an eye on those forecasts for hot, possibly dry, conditions over the next ten days. Contracts did close under the highs of the day on talk that the early gains were overdone and that even if there is some weather damage, we’re still looking at a pretty large crop. Doane has corn at 12.312 billion bushels with an average yield of 155.6 bushels per acre and FC Stone pegs the crop at 12.814 billion bushels with an average yield of 160 bushels per acre. According to the USDA, 76% of corn is silking, compared to 89% on average with 14% at dough making stage, compared to 29% on average and 68% of corn in good to excellent shape, down 2% from a week ago. Ethanol futures were higher.

The wheat complex was higher on technical buying, short covering and spillover from beans, corn and the outside markets. A lower dollar makes U.S. goods less expensive on the export market, helping competition. For spring wheat, 98% has headed, compared to 100% on average and 3% is harvested, compared to 15% on average with 71% of the crop in good to excellent condition, down 3% on the week. For winter wheat, 85% is harvested, compared to 90% on average. European wheat was higher on outside market direction and fund buying, but gains were trimmed late by what Dow Jones Newswires called a lack of confidence; November Paris was up 1.8% and November London was 1.2% higher.