Market News

Beans, corn lower on weather: July 15, 2009

Soybeans were lower on profit taking, technical selling and a lack of follow through buying. Crop weather is good and there’s talk that China will be selling beans from state reserves next week. Beijing did pick up 113,000 tons of 2008/09 U.S. beans ahead of the open. Losses were limited by the solid fundamentals and the outside markets with the dollar lower and the Dow Jones Industrial Average and crude oil sharply higher. Soybean meal was lower and bean oil was higher on the adjustment of meal/oil spreads. A group of South Korean feedmills bought 55,000 tons of 2009/10 U.S. soybean meal. The USDA’s weekly export sales report is out Thursday at 7:30 AM Central. Soybeans are pegged at 450,000 to 700,000 tons, meal is seen at 75,000 to 200,000 tons and oil is placed at 20,000 to 80,000 tons.

Corn was lower on profit taking, the good weather and technical selling. Like beans, contracts were up early on short covering and the outside markets but couldn’t follow through. Farmer selling remains light and export demand has been solid recently, keeping the downside limited. This year’s crop is projected at the second largest eve, but there’s still a long way to go until it’s in the bin. Ethanol futures were mostly higher. A group of South Korean feedmills purchased 110,000 tons of U.S. corn, filling a tender issued earlier in the week. According to the Buenos Aires Grain Exchange, 99% of Argentina’s corn crop has been harvested with the crop the smallest in more than 10 years at 12.5 million tons following widespread drought. Weekly U.S. corn sales are expected to be between 600,000 to 1.050 million tons.

The wheat complex was mostly higher on short covering, technical buying and the lower dollar. A lower dollar makes U.S. goods less expensive on the export market, helping competition, and there are signals that demand for U.S. wheat is increasing. Also, with collection almost three quarters complete, winter harvest pressure is lessening. Still, fundamentals remain negative and contracts closed below the highs of the day on that large supply, slack demand and spillover from beans and corn. European wheat futures were higher on spillover from U.S. trade and the generally higher tone of the broader market; November Paris was up .7% and November London was 1.3% higher. The Buenos Aires Grain Exchange reports that recent rain has helped Argentina’s wheat planting pace but a significant portion of growing areas remain much drier than normal, continuing the drought that harmed the soybean and corn crops. Weekly U.S. wheat sales are estimated at 300,000 to 500,000 tons.