Market News

Tight supply, strong demand support nearby soybeans: June 18, 2009

Soybeans were mixed on old crop/new crop spread trade and the modestly higher crude oil. Nearby contracts had continued support from the overall tight supply and strong demand while deferreds were lower on expectations for increased acreage and fairly good near term weather forecasts. Weekly export sales for beans were near the high end of estimates and meal and oil were larger than expected. Soybean meal was mixed with nearbys up on bull spreading as meal nearly mirrored soybeans. Soybean oil was lower on product spread trade.

Corn was modestly lower on technical and fund selling. Near term weather forecasts for most of the Cornbelt generally look good for development. Losses were limited by the firm crude oil and expectations for a reduced acreage estimate from the USDA at the end of the month. Weekly export sales were solid, but not spectacular, limiting some of the buying interest linked to the report. Aside from the weather and export sales, there really wasn’t much fresh news one way or the other.

The wheat complex was modestly lower on fund and technical selling. Wheat’s fundamentals remain negative with the large world supply and lack of demand for U.S. wheat. Still, the dollar was lower, which helps U.S. wheat compete on the export market. Chicago and Kansas City did see harvest pressure, but there are concerns about cool, wet conditions in some areas delaying activity. However, that cool, wet system isn’t all that widespread. European wheat was just about steady with no real fresh news; November Paris was up .2% and November London was flat. Japan bought 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). Egypt canceled a tender for wheat. Strategie Grains now pegs 2009/10 European Union soft wheat production at 126.3 million tons, down 10% from 2008/09 on smaller planted area and recent dry weather in eastern E.U. nations.