Market News

Soybeans up modestly on tight supply

Soybeans were modestly higher on technical and speculative buying. There’s more rain in the forecast for the Midwest, delaying planting in some critical production areas. The fundamentals remain supportive, but gains were limited by old crop/new crop spread trade; the spread between July and November does remain wide, reflecting the fundamentals. It was an up and down session with the outside markets mixed and not much fresh supportive news. Soybean meal was mixed on consolidation and a lack of new support news, along with product spread trade. That spread trade supported bean oil. Brazilian crop consultancy Celeres states that as of June 12, 72% of Brazil’s 2009 soybean crop has been sold compared to 69% a week ago and the five year average of 71%. China’s national Grain and Oils Information Center is projecting a decline in soybean imports between now and the end of the marketing year September 30.

Corn was lower on technical and fund selling. Contracts were up early but couldn’t follow through. Corn planting is pretty much finished and conditions generally look good for development. Analysts are expecting at least some revision in the USDA’s planted acreage update at the end of the month with the total area potentially falling below 85 million acres which may help support corn ahead of the report. Fundamentally, there just wasn’t much fresh news one way or the other.

The wheat complex was lower on technical and fund selling. Chicago and Kansas City had additional pressure from the ongoing winter wheat harvest with 6 to 10 day forecasts generally hot and dry, especially in the Southern Plains, and yields increasing as harvest moves north. Minneapolis was lower on the overall fairly good condition of the spring wheat crop and the complex’s negative fundamentals. U.S. fundamentals are bearish and so are the world fundamental influences with fairly weak demand and a large available supply. European wheat futures were weak but contracts were up from the day’s lows on oversold signals; November Paris was down .3% and November London was .4% lower. Japan’s Ag Ministry issued a tender for 127,000 tons of wheat (41,000 tons Canadian western red spring, 37,000 tons U.S. dark northern spring, 28,000 tons U.S. semi hard and 21,000 tons U.S. western white).

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