Market News

Grains and oilseeds mostly lower ahead of USDA reports: June 29, 2009

Soybeans were mostly lower on old crop/new crop spreading and pre-report position squaring. July was up on that spread activity and the tight supply and good demand while deferreds were lower on spreading, good near term weather forecasts and expectations for increased acreage in the USDA update Tuesday morning. Old crop beans had additional support from the higher Dow Jones Industrial Average and strong trade in crude oil. According to the USDA, as of Sunday, 96% of soybeans are planted, compared to 98% for the five year average, 91% have emerged, compared to 95% on average and 5% is blooming, compared to 10% on average. 68% of soybeans are rated in the good to excellent category, up 1% from last week.

Corn hit new two month lows on fund and technical selling. Crop weather is generally good across much of the Cornbelt and is expected to stay that way for the next couple of weeks. There are still a lot of uncertainties ahead of the USDA acreage update due out at 7:30 AM Central Tuesday morning with analysts’ estimates falling in a fairly wide range. The USDA will also be updating quarterly stocks with corn expected to be up modestly from a year ago. As of Sunday, the USDA reports that 4% of corn has silked, compared to 8% on average and 72% of the crop is in good to excellent condition, up 2% from a week ago. Ethanol futures were mostly lower. Unknown destinations bought 118,000 tons of U.S. corn (60,000 tons 2008/09 and 58,000 tons 2009/10) and a total of 232,000 tons of purchases were switched from an unnamed buyer to South Korea.

The wheat complex was lower on technical and fund selling, along with the higher dollar. The fundamentals remain negative with a large supply and weak demand. For the winter wheat crop, 40% has been harvested as of Sunday, compared to 46% on average but forecasts do look good for harvest activity this week and 45% of the crop is in good to excellent condition, unchanged on the week. For spring wheat, 15% has headed, compared to 40% on average and 76% of spring wheat is in good to excellent shape, down 1% from last week. European wheat was higher on consumer buying and a lack of new selling interest ahead of the end of the month and end of the quarter; November Paris was up 1.6% and November London was 1.5% higher.