Market News

Corn lower on forecasts for good growing weather: June 24, 2009

Soybeans were mostly higher on speculative and technical buying. Soybeans remain fundamentally bullish with nearbys supported by the tight supply and strong demand and gains in the deferreds limited by expectations for increased acreage and old crop/new crop spread trade. There wasn’t much fresh news and the outside markets didn’t provide any real direction. November did manage to hold above the 50-day moving average thanks in part to the slow planting pace. Soybean meal was higher and soybean oil was lower on product spread trade. Unknown destinations bought 49,000 tons of 2009/10 U.S. soybean oil. Taiwan’s Breakfast Soybean Procurement Association announced a tender for 60,000 tons of soybeans from either the U.S. or Brazil. The Census Bureau’s May soybean crush numbers are out Thursday at 7 AM Central. The crush is placed at 148.8 million bushels, bean oil stocks are seen at 3.220 billion pounds and meal stocks are pegged at 435,000 short tons. The USDA’s weekly export numbers are out at 7:30 AM Central Thursday. Soybeans are pegged at 50,000 to 450,000 tons, meal is seen at 75,000 to 300,000 tons and oil is placed at 0 to 20,000 tons.

Corn was lower on technical selling and profit taking, along with spillover pressure from crude oil. Near term weather forecasts look generally good across most of the Midwest with hot and wet conditions in store. However, traders remain a little cautious ahead of the USDA’s planted area update on the 30th. The latest estimate, from Farm Futures Magazine, has acreage down 3% from the USDA’s March guess following the late start to planting in many critical growing areas. That helped contracts hold above Monday’s lows. Ethanol futures were lower. South Africa’s Crop Estimates Committee has raised its 2008/09 production forecast to 11.6 million tons with white corn at 6.8 million and yellow corn at 4.8 million tons. Weekly corn sales are expected to be between 600,000 and 1 million tons.

The wheat complex was lower on profit taking, technical selling and harvest pressure in Chicago and Kansas City. There wasn’t any new supportive news and the fundamentals remain negative with the large world supply and lack of demand, especially for U.S. wheat. The dollar was up, which makes U.S. goods more expensive on the export market and U.S. wheat’s already at a premium to other origins. Another factor was a ruling by the Senate Homeland Security and Government Affairs Permanent Subcommittee that there was excessive speculative interest in the wheat market last year, potentially opening the door for increased regulation. European wheat was lower on a lack of fresh fundamental news; November Paris was down .9% and November London was 1.7% lower. The Buenos Aires Grain Exchange states that wheat planting continues to move much slower than normal with current planted area less than half of what was planted this time last year. Jordan bought 100,000 tons of optional origin hard wheat. Egypt issued a tender for 55,000 to 60,000 tons of wheat. Weekly wheat sales are estimated at 200,000 to 400,000 tons.