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Good weather pressures soybeans: July 13, 2009
Soybeans were lower on technical and speculative selling, along with spread unwinding with corn and wheat. There was also spillover pressure from the lower crude oil. Past that, near term crop weather continues to look non-threatening across the Midwest and the weekly export inspections were less than what’s needed weekly to meet projections. According to the USDA, 24% of soybeans are blooming, compared to 43% for the 5-year average with 66% of the crop good to excellent condition, unchanged from last week. Soybean oil was higher on the unwinding of product spreads, technical buying and a purchase of 24,000 tons of 2009/10 soybean oil by unknown destinations. Meal was lower on that product spread trade and the implications of a larger soybean crop. The National Oilseed Processors Association’s June soybean crush numbers are out Tuesday at 7:30 AM Central; the crush is seen at 131.0 million to 136.5 million bushels and oil stocks are expected to be between 2.649 billion to 2.770 billion pounds.
Corn was higher on short covering, spillover from wheat and spread trade with beans. There has been a continued lack of deliveries on the July contract, which expires Tuesday, with farmers holding on to supplies. Contracts were due for a bounce and so far this week, unknown destinations and South Korea have purchased U.S. corn. The USDA reports that 16% of this year’s crop is silking, compared to 32% on average with 71% of corn in good to excellent shape, which is unchanged from a week ago. The July contract aside, gains were limited by the overall good crop weather. Ethanol futures were modestly lower. Unknown destinations bought 120,000 tons of 2009/10 U.S. corn, South Korea’s Major Feedmill Group purchased 110,000 tons of corn (half U.S., half optional origin) and Zambia has issued a tender for 110,000 tons of corn to shore up state reserves.
The wheat complex was higher on fund buying and short covering. The fundamentals remain extremely negative, but contracts were oversold and there are some signs that export demand could be picking up. For spring wheat, 57% of the crop has headed, compared to 83% on average with 71% of spring wheat in good to excellent condition, 1% less than a week ago and for winter wheat, 66% has been harvested, compared to 69% on average. European wheat was higher in thin trade on technical buying and higher equity activity; November Paris was up 1% and November London was .9% higher. Ukraine’s Ag Ministry reports that as of July 10, this year’s wheat harvest is 18% complete with the total so far at 3 million tons.
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