Friday June 12, 2009

Ag commodities took it on the chin today with corn losing $.15, old beans $.20 and new down .13. Yesterday the market seemed to find support in forecast calling for heat to begin in the the 5 day and beyond forecast, today the market seemed to realize that this is just what producers are looking for in most parts of the belt. A rebound in the value of the Dollar seemed to pressure the Ag commodities as well.

The July corn contract lost $.18 for the week with December down $.20 as traders assess the adequate old crop stocks and new crop production and demand prospects. Traders will be watching for the weekly crop ratings out Monday afternoon with expectations of slight improvement vs last year and leaving ratings nearly 15 points better than a year ago. The July and December corn contracts both had a hard time pushing through key resistance levels of $4.50 and $4.70 this week and that looks to continue unless a weather threat develops.

The soybean market had nearly a $.50 range from the night session through the end of the day session before closing lower, for the week beans were able to post modest gains with July up $.20 and November gaining $.15. The soybean market will continue to weigh old crop bean tightness vs an apparently more comfortable new crop situation provided the opportunity to get the balance of the crop in the ground. Traders expect the Monday planting report to show about 10 million acres left to plant a seemingly significant number. I would expect to see continued volatility in the old crop / new crop soybean spreads as the market searches for a price to ration the historically tight 110 million bushel carryout.