Market News

Soybeans sharply lower on weather, outside markets: June 22, 2009

Soybeans were sharply lower on speculative and technical selling, along with spillover from the outside markets. Soybeans continue to have a tight supply and good demand, but with the outside markets that negative, it’s hard to generate much buying interest. According to the USDA, 91% of soybeans have been planted as of Sunday, compared to 95% on average, 84% has emerged, compared to 90% on average and 67% of soybeans are in good to excellent condition, up 1% from a week ago. Weather over the near term looks good for planting in most areas of the Midwest. Soybean meal hit one month lows and bean oil was lower with both pits seeing spillover pressure from soybeans. Bean meal had additional pressure from the unwinding of product spreads with bean oil. China’s Ministry of Finance announced it will either lower or suspend export taxes on a number of products including soybeans starting July 1 as Beijing attempts to help China’s flagging exports.

Corn was lower on fund and technical selling, in addition to the outside markets, with most contracts breaking what had been support. Growing conditions across the Cornbelt are generally good for development, planting is over and what was planted has emerged. Still, the trade is very interested in the USDA’s planted acreage report out Tuesday, June 30 at 7:30 AM Central. The USDA reports that 70% of corn is in good to excellent shape, unchanged from last week but with 3% shifting from the good category to excellent. Ethanol futures were lower.

The wheat complex was lower on technical and fund selling, along with the higher dollar. Chicago and Kansas City received additional pressure from harvest selling. For winter wheat, 95% has headed, compared to 97% on average and 20% is harvested, compared to 31% on for the five year average with 45% of the winter crop in good to excellent condition, up 1% from a week ago. For spring wheat, 99% has emerged, compared to 100% on for the five year average with 77% of spring wheat in good to excellent shape, up 2% on the week. September Chicago hit a seven week low. European wheat was lower with traders selling off ahead of harvest; November Paris was down 2.1% and November London was 2.3% lower. According to China’s Ministry of Finance, wheat export tariffs will also be reduced or cut starting July 1. Argentina’s Ag Secretariat states that wheat conditions continue to deteriorate on hot, dry weather. Brazil bought 50,000 to 100,000 tons of wheat from Canada.