Market News

Soybeans, corn and wheat higher ahead of supply and demand numbers: July 9, 2009

Soybeans were higher on technical buying and short covering, along with some outside market direction. The dollar index was lower and it was a mixed day for the Dow Jones Industrial Average and crude oil. Weekly export sales were larger than expected, especially the new crop sales, and fundamentals remain supportive with a generally tight supply and strong demand. The USDA’s monthly supply and demand numbers, out Friday at 7:30 AM Central, are expected to show at least some continued tightening of the old crop supply. We’ll have full coverage at BrownfieldAgNews.Com. Soybean meal and oil were higher on short covering and pre-report position squaring. China’s Ministry of Commerce has increased its July 2009 soybean import estimate to 4.28 million tons, while lowering the June guess to 4.23 million tons.

Corn was higher on short covering and technical buying. The crop weather remains generally good, but contracts were due for a bounce after the recent losses. Weekly export sales topped pre-report estimates with combined old and new crop sales over 45 million bushels. Analysts do expect the USDA to raise old and new crop ending stocks with the average estimates at 1.692 billion bushels and 1.567 billion bushels, respectively. That implies at least some change to the USDA’s official production estimate, balance sheet adjustments and a potential revision of the average yield projection. Ethanol futures were higher.

The wheat complex was higher on short covering, technical buying and the lower dollar index. Traders have been at least somewhat encouraged by Egypt’s recent purchase of U.S. wheat and the reluctance of Egypt to buy wheat from Russia following quality and payment disputes; with the recent drop in price and lower trade in the dollar, U.S. wheat’s a little more competitive on the world market right now. Weekly sales were the best in several weeks at 21.5 million bushels. Analysts see the USDA raising new crop ending stocks while cutting old crop slightly, while increasing the 2009 production estimate. European wheat was higher on short covering ahead of harvest; November Paris was up 1.8% and November London was .9% higher. Tunisia bought 92,000 tons of optional origin wheat at $179 per ton. Ukraine’s Ag Ministry states that the wheat harvest is 12% complete at 2.1 million tons.