Market News

Soybeans, grains recover some session losses: July 29, 2009

Soybeans were supported by active exports and tight old-crop supplies. After opening sharply lower, futures crept back with the August contract closing higher. A rumored sale to China Tuesday was confirmed early Wednesday morning; however DTN says another attempt to sell 500,000 metric tons from reserves failed because the price was too high. Outside market pressure was offset by the sale. In addition, cool temperatures that are keeping crop maturity behind schedule have been bullish.

September corn had a small rally toward the close of trading to end the session fractionally higher. That was in spite of crude oil being sharply lower on large stocks. DTN reports that commercial support came from traders trying to secure cash grain, most likely for near-term export business. Argentina’s corn acreage may be 34 percent less than last year. That would result in a hefty reduction of stocks. Government policy, high production costs and ongoing drought may cause farmers to consider switching to soybeans. But longer-term fundamentals for corn are bearish, limiting the potential of a rally.

Wheat was lower but was able to come up from session lows because of spill-over support from corn. While the row crops received support from commercial buying to limit losses, the same can’t be said for wheat. DTN calls wheat’s fundamentals bearish. It doesn’t look very positive in the long-term either because of excessive global supplies and lackluster exports.