Market News

Soybeans lead corn, wheat higher: July 17, 2009

Soybeans were sharply higher on technical buying and short covering, in addition to the higher crude oil. Contracts were due for a bounce after November hit a three and a half month low Thursday and fundamentals remain supportive. Also, U.S. soybeans prices are now significantly below the Argentine and Brazilian prices following widespread drought in South America. According to Allendale’s David Kohli, at Rotterdam, Brazilian beans are at $458 per ton ($12.46 per bushel) and Argentine beans are at $455.75 ($12.40), while U.S. soybeans are $425.25 ($11.57). Meal and oil were higher on short covering and fund buying.Corn was higher on technical buying and short covering, along with spillover from beans. Corn was also due for a bounce and farmer selling remains fairly light. Gains were limited by the good crop weather, the large supply and weak demand when compared to soybeans. Still, those weren’t enough to offset the buying interest. Even after a week of very good growing weather for much of the Midwest, corn was only down around $.06 and September found solid buying interest at Thursday’s new contract low of $3.16 ½. Ethanol futures were higher.

The wheat complex was higher on technical buying, short covering and spillover from beans. There was no real fresh fundamental news, but wheat was oversold and due for a bounce after the recent losses. Harvest pressure is easing with activity around three quarters complete. Wheat had the dictionary definition of an up and down week, closing higher Monday, Wednesday and Friday and lower Tuesday and Thursday. Fundamentals remain negative, but there is continued talk about new export demand. European wheat was mixed in thin trade with a number of traders on the sidelines waiting for more information about harvest; November Paris was up .2% and November London was .4%.