Market News

Soybeans fight pressure, closing mostly higher: July 10, 2009

Soybeans were mixed mostly higher on old crop/new crop spread trade and consolidation, along with spillover from the outside markets. The dollar was higher and the Dow Jones Industrial Average and crude oil were lower, with crude closing under sixty dollars a barrel. USDA numbers weren’t much of a surprise with old crop stocks left unchanged, supporting July, and bigger new crop production and ending stocks estimates. In any event, traders ran out of selling interest near the close, allowing for that mostly higher finish. Soybean meal was mixed on the mostly firm beans, short covering and product spread trade. Bean oil was up on that product spreading and short covering. China bought 110,000 tons of 2009/10 U.S. soybeans, bringing the unofficial week to date total to 290,000 tons. China’s General Administration of customs reports that imports during June were 4.71 million tons, bringing the year to date total to 22.09 million tons, up 28% from the first half of 2008. Edible oil imports for the first six months of 2009 totaled 3.44 million tons, 9.1% below a year ago, with June imports at 770,000 tons.

Corn was mostly lower on fund and technical selling, along with outside market direction; July was up on light deliveries. USDA raised the old crop ending stocks, production and new crop ending stocks estimates. USDA also raised the new crop export projection while lowering feed usage and leaving ethanol use unchanged. Crop weather generally looks good over the near term, maybe a little dry, with scattered chances for rainfall. South Korea’s Major Feedmill Group is tendering for 110,000 tons of corn (55,000 tons U.S. and 55,000 tons optional origin) for delivery between January 15 and 25, 2010. According to China’s General Administration of Customs, June corn exports were 30,884 tons, bringing the year to date total to 59,698 tons, a decrease of 60% on the year.

The wheat complex was lower on technical and fund selling, in addition to the higher dollar. The USDA left old crop ending stocks unchanged, but its well above the year ago figure. The new crop production and ending stocks estimates were both up from June’s projections. According to DTN’s John Sanow, the numbers weren’t shocking and they did confirm the continued fundamental negativity of the wheat market, both in the U.S. and abroad. The supply is more than ample globally, keeping demand limited and with the exception of drought in Argentina, there aren’t many crop weather problem areas, at least for now. There is an emerging El Nino pattern in Australia which is expected to be concentrated primarily in the Southern Hemisphere. The lower U.S. business pressured European trade; November Paris was down .9% and November London was 1.1% lower.