Market News

Beans sell off on talk of bigger acreage: June 19, 2009

Soybeans were lower on speculative and technical selling, along with profit taking. Even with the supportive fundamental influences, beans couldn’t get much traction with no real direction from the outside markets or fresh fundamental news. Also, ahead of the USDA planted area update, analysts expect an increase in soybean acreage with Informa expecting planted area to be around 78.869 million and Allendale pegging acreage at 78.484 million. Either way, it’d be a record for planted area. Soybean meal and oil were lower on the lower trade in soybeans, but losses in oil were limited by product spread trade.

Corn was lower on technical weakness, fund selling and spillover from soybeans. It was an up and down session with occasional support from talk of acreage switching. Ahead of the June 30 USDA numbers, analysts are projecting a decrease in corn acreage following planting delays. However, it’s still expected to be one of the largest planted areas in fifty years. Two major estimates came out Friday with Allendale projecting acreage at 84.775 million acres and Informa pegging planted area at 83.111 million acres following widespread planting delays. Ethanol futures were lower.

The wheat complex was lower on fund and technical selling, along with harvest pressure in Chicago and Kansas City. The fundamentals remain negative with a large world supply and weak demand for U.S. wheat. Losses were limited by the lower dollar, which helps U.S. wheat compete on the export market. Also, on a purely technical basis, contracts are oversold. In particular, July Chicago is due for a bounce, losing more than $1.10 since the start of the month. The Oklahoma Wheat Commission states that so far, winter wheat yields are mostly around 10 to 30 bushels per acre, with a high of 45, and test weights around 56 pounds per bushel with moisture mostly at 11%. European wheat was lower in pretty quiet trade with November contracts in London and Paris down fractionally. Iraq bought 150,000 tons of wheat from Australia and 100,000 tons from unknown destinations. South Korean miller Dongah Flour Mills bought 22,900 tons of U.S. wheat. National Australia Bank pegs the 2009 wheat crop at 22.6 million tons, up 5.6% from 2008, thanks to timely rainfall.

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