Market News

Corn up modestly before Tuesday’s USDA numbers: June 26, 2009

Soybeans were mixed on old crop/new crop spread trade and the mixed outside markets. The dollar was lower, but so were the Dow Jones Industrial Average and crude oil. The fundamentals remain supportive, which propped up the nearby contracts. However, deferreds were lower on forecasts for good crop weather and expectations for increased acreage in the upcoming USDA report. Soybean meal was mixed on bull spreading and the solid demand. Bean oil was lower on product spread trade and the lower crude oil. The Buenos Aires Grain Exchange states that the Argentina’s soybean harvest has completely wrapped up with production pegged at 32 million tons, well below the initial estimate of 50 million tons following a hot, dry growing season.

Corn was modestly higher on short covering, technical buying and the lower dollar index. Near term crop weather remains good, helping crop development. Traders are getting ready for the USDA’s planted area update out Tuesday, June 30th, expecting a smaller acreage estimate and seasonally tighter quarterly corn stocks. On average, the trade may expect a smaller area estimate but there’s a wide range of projections and a chance, however slight, that the Ag Department could leave the figure unchanged, at least for now. Ethanol futures were mostly higher. According to the Buenos Aires Grain Exchange, 94% of Argentina’s corn crop has been harvested with production seen at 12.7 million tons due to drought damage.

The wheat complex was mixed with Chicago up on the lower dollar and technical buying, along with some disease concerns in the soft red winter crop. Kansas City was lower on hard red winter harvest pressure and forecasts for good harvest weather with generally hot and dry conditions. Minneapolis was lower on profit taking and a lack of new buying interest. Overall, the fundamentals for wheat remain negative with a large available supply and poor demand, especially for U.S. supplies. European wheat was just about unchanged in end of the week consolidation activity. Japan’s Ag Ministry bought 44,632 tons of wheat from Australia and Canada and South Korea’s Daehan Flour Mills purchased 25,300 tons of U.S. wheat (10,500 tons western white, 8,500 tons dark northern spring and 6,300 tons hard red winter). The Buenos Aires Grain Exchange reports that wheat condition ratings continue to deteriorate and that final planted area should be the smallest in more than a century.