Market News

Weather, profit taking pressure beans and corn: July 24, 2009

Soybeans were lower on profit taking and technical selling. Continued old crop/new crop spread trade was an additional feature. There was no real fresh news for soybeans, the cash basis was weak and weather is generally good, so traders pretty much took the path of least resistance. Losses in the nearby contracts were limited by the overall tight supply and strong demand. Soybean meal was mostly lower and oil was down on end of the week profit taking and spillover from soybeans. After failing to auction off any soybeans this past week because prices were above market level, China will give it another shot next week. Beijing’s putting 500,000 tons of soybeans on the block in the northeast crop region, according to Dow Jones Newswires, and will probably start prices off around local market levels.

Corn was lower on fund selling and profit taking in light end of the week trade volume. Crop weather continues to look generally favorable across the Cornbelt over the near term and farmer selling has increased after some recent higher trade. The sentiment on the floor is that any potential decrease in acreage August 12 could be balanced out by improved yields. Still, the development rate remains slower than average and there are some concerns about the number of growing degree days. Right now, initial fall forecasts don’t show an early frost, but of course, that can change. Ethanol futures were lower.

The wheat complex was lower on profit taking, technical selling and the lower beans and corn. Fundamentals remain negative with a large available supply and not much fresh demand. Wheat rallied Thursday on the back of corn and with corn moving lower, wheat gave up those slight gains. Overall, there was no new news and while the dollar was weak, it didn’t have much of an impact. USDA will no longer be using field level data when estimating durum and spring wheat crop size. Instead, the National Agricultural Statistics Service will be surveying producers to get their yield and production estimates for the August 12 crop report. USDA isn’t offering a reason for making the switch. European wheat was lower on harvest pressure and a lack of new demand; November Paris was down .9% and November London was 1.2% lower. India’s federal government has decided to suspend wheat exports due to concerns over insufficient monsoon rains.