Market News

Soybeans higher on supply, demand and outside markets: June 23, 2009

Soybeans were higher on technical and speculative buying, along with some spillover from the outside markets. The Dow Jones Industrial Average was lower, but the dollar was down and crude oil was higher. Soybeans continue to have a supportive set of fundamentals with a tight supply and good demand and contracts were oversold after Monday’s drop. Traders are concerned about the slow pace of planting in some areas of the Midwest and Delta and with the late start to the planting season – the availability of early harvested beans is in question. Soybean meal and oil were higher on the higher move in soybeans; meal had additional support from oversold signals and bean oil picked up extra interest from a rally in crude oil. China revised their June 2009 soybean import projection to 4.34 million tons, down from 4.617 million. However, that would still be a record for the month. During May, China imported 3.52 million tons of soybeans. Statistics Canada estimates 2009 canola planting at 15.825 million acres, up from the March guess but down from 2008, and pegs beans at 3.476 million acres, above both the March figure and the year ago total.

Corn was higher on short covering, technical buying and spillover from beans and crude oil. Across the Cornbelt, crop development weather is generally good. However, there are still a lot of questions about this year’s total planted area ahead of the June 30th planted area update and if the hot weather continues longer than expected, it could damage the crop. That uncertainty around the crop is reflected on the narrowing of old crop/new crop spreads. July and December both held at key support points. Ethanol futures were mostly higher. Statistics Canada expects corn planting to be around 3.041 million acres, down modestly from March but up slightly from 2008.

The wheat complex was mostly higher on technical buying and the lower dollar. A lower dollar makes U.S. goods less expensive on the export market, cancelling out some of the premium over other origins. Minneapolis was higher on the comparatively good supply and demand outlook along with some development concerns. Gains in Chicago and Kansas City were limited by harvest pressure and the overall fundamentals remain negative with a large world supply and pretty weak demand. European wheat was mixed in consolidation trade; November Paris was up .7% and November London was flat. Japan’s Ag Ministry cancelled their weekly wheat tender without explanation. Statistics Canada has total 2009 wheat planting at 24.932 million acres, down from both March and 2008, with spring wheat at 17.485 million, durum at 5.580 million and winter wheat at 1.867 million acres.