Market News

Beans mixed, wheat and corn lower: June 25, 2009

Soybeans were mixed with old crop/new crop spread trade and the mixed outside markets the big features of the session. Nearby contracts had continued support from the tight supply and good demand while deferreds were down on expectations for increased acreage. The tight supply is reflected in the basis levels, which have been firm this week as buyers bid up to get those supplies. Past that, there wasn’t much news one way or the other ahead of the USDA’s planted area and quarterly stocks update June 30. Soybean meal was mixed, pretty much mirroring beans, and bean oil was higher on spillover from crude oil. The U.S. Census Bureau’s May crush numbers came out smaller than expected at 146.1 million bushels. Taiwan’s Breakfast Soybean Procurement Association purchased 58,000 tons of U.S. soybeans at a $3.43 premium over the CBOT November futures contract.

Corn was lower on technical and fund selling, along with a lack of new buying interest. Outside of a solid weekly export sales report, there has not been much fresh news ahead of next week’s USDA planted area and quarterly stocks update. Near term weather conditions generally look good across the Midwest. Contracts stayed in a pretty narrow range due to that lack of new news as traders get ready for those upcoming USDA numbers. Ethanol contracts were mostly lower.

The wheat complex was lower on technical selling, harvest pressure and the firm dollar. Higher trade in the dollar makes U.S. goods more expensive on the export market and U.S. wheat is already at a premium to other origins. The fundamentals remain negative with a large available supply and weak demand. Hard and soft red winter harvest weather looks good with mostly hot and dry conditions in both regions. Chicago September hit its lowest price since late April and the July has lost well over $1.25 since the start of the month. European wheat was mixed with pressure from the fundamentals and support from a purchase of 60,000 tons of French wheat by Egypt. The International Grains Council has left its 2009/10 world wheat production estimate unchanged at 652 million tons.