Corn Market Review for 6/28/2010

September Corn finished down 7 1/4 at 342 1/4, 1 1/2 up from the low and 6 1/4 off the high. December Corn closed down 7 3/4 at 352 3/4. This was 6 3/4 off the high and 1 1/2 up from the low.

December corn traded lower overnight and then stair-stepped to a series of new lows during the day session. This included a new low for the day just prior to the close. Today’s lows represented new lows for the year for December corn. The market also pushed below the September, 2009 low late in the day, and this took the December contract to its lowest level since mid February, 2007. The break was credited to liquidation by longs as well as by spreaders versus soybeans which posted a sharp rally late in the day. Traders said that the negative action was sparked by a mild and dry forecast for the Midwest this week which is considered very favorable to the fast-developing corn crop. This afternoon, the USDA will issue its lates Crop Progress report and traders are looking for mixed to favorable results versus last week due to a combination of too much rain in some areas and favorable dry conditions in others over the past week. However, one analyst noted that the upcoming week of generally very dry weather would likely boost the quality rating of the overall corn crop on next week’s report. This week’s export inspections for corn were 35.4 million bushels, up from last week’s very poor total of 29.2 million. This is still well below the average inspections of 47.7 million bushels that are needed each week to reach the USDA’s current export projection for 2009/10. Cumulative inspections stand at 75.9% of the USDA projection versus a 5-year average of 78.1%.

September Rice closed unchanged at 10.21, 0.04 up from the low and equal to the high.

 

Wheat Market Review Report for 6/28/2010

September Wheat finished down 6 at 465, 5 3/4 off the high and 5 1/2 up from the low. December Wheat closed down 3 3/4 at 493 3/4. This was 6 3/4 up from the low and 3 off the high. September Wheat closed down 6 at 465, 5 3/4 off the high and 5 1/2 up from the low. December Wheat finished down 3 3/4 at 493 3/4. This was 6 3/4 up from the low and 3 off the high

Wheat ended modestly lower today, which placed it in the broad middle ground between soybeans, which finished higher, and corn, which closed sharply lower. Traders said that a higher dollar helped to pressure the grain markets today and that a dry weather forecast for the week for hard and soft red winter wheat areas added to the negative tone. This is considered very favorable to harvest progress, particularly after heavy and unwelcome rains in the north central Midwest over the past week and in the north central Plains. The main buyer for Egyptian wheat said today that they would like to broaden the origins for Egypt’s purchases, but that Russian wheat prices regularly pressure US and French wheat premiums. Egypt is the world’s biggest buyer of wheat and the US has been shut out of most business with Egypt since last year. This week’s export inspections for wheat were 16.01 million bushels, up from last week’s total of 13.4 million. Inspections need to average 17.4 million bushels each week to reach the USDA’s export projection for 2010/11. Cumulative inspections stand at 5.8% of the projection versus a 5-year average of 7.1%.

December Oats closed down 1/2 at 262 1/2. This was 7 1/2 up from the low and 3 1/2 off the high.

 

Soybean Complex Market Recap for 6/28/2010

August Soybeans finished down 1/2 at 940 1/2, 3 up from the low and 6 1/4 off the high. November Soybeans closed up 6 1/2 at 918 1/2. This was 10 1/4 up from the low and 6 1/4 off the high.August Soybeans closed 1/2 at 940 1/2, 6 1/4 off the high and 3 up from the low. November Soybeans finished up 6 1/2 at 918 1/2. This was 6 1/4 off the high and 10 1/4 up from the low.

August Soymeal ended  up 3 at 283.3. This was 5.8 up from the low and 1.0 off the high.

August Soybean Oil ended down 0.22 at 37.11, 015 up from the low and 0.49 off the high.

November pushed below last week’s lows early in the day and then rallied to make a significant gain just prior to the close. Traders said that buying by spreaders versus corn was a factor in the rally along with short covering by specs and that this triggered more buying above Friday’s highs. Meal gained sharply on oil which finished lower on the day. New crop contracts gained on the old crop July contracts in both soybeans and meal to end the day. Weather forecasts remain dry throughout the Midwest this week with moderate temperatures in most areas north of the Delta. Forecasters indicate that Tropical Storm Alex could strengthen to a hurricane by tomorrow. Landfall is still expected in the western Gulf of Mexico. The strength and direction of the storm could affect weather in the US. Forecasters note that if the storm moves toward the northern Gulf, which is not expected, it would boost rainfall substantially in the Delta, and this would be considered beneficial. This week’s soybean export inspections were just 4.5 million bushels, down from 8.15 million last week. This is below the average pace of 9.7 million bushels that is needed each week to reach the USDA’s current export projection for 2009/10. Cumulative inspections stand at 93.4% of the USDA’s projection versus a 5-year average of 90.0%. 

With today’s analysis mostly about weather and USDA reports, traders might want to take a peek at the commercial traders momentum.  The Commercial Trader momentum can be tracked by using the Commodity Futures Trading Commission Commitment of Traders reports.  Our idea is that, in a value driven commodity futures market no one knows fair value like the people who produce it or, have to use it.  In fact, it is precisely their sense of value that provides the commodity market’s rhythmic meanderings that swing traders love so much.  Let’s face it, producers know when their product is overvalue and it should be sold just as well as end line users know when they should be stocking up at low prices.  Therefore, trader should be able to incorporate this valuable information into their commodity trading system.

This blog is publicized by Andy Waldock.  Andy Waldock is a financial advisor, broker, asset manager, trader, and analystfor Commodity & Derivative Advisors, located in Sandusky, Ohio.  For that reason, Andy Waldock may have positions for himself, his family, or his customers in any commodity future market discussed. The blog is meant to develop a discussion and educate those with an interest in the commodity future markets. The commodity markets employ a high degree of leverage and commodity trading  may not be appropriate for all investors.   Investing in the commodity futures could result in substantial risk.  If you are interested in reading other published articles, commenting  on his writings or subscribing to Andy’s blog, please visit http://blog.commodityandderivativeadv.com.

The daily commentaries provide a review of any reports released that day, a recap of each commodity’s traded price activity, an analysis of the factors that influenced price activity, and a look ahead at the schedule for the next day.  CME Group provides market commentaries for soybeans, corn, wheat, silver and gold.