Wednesday, June 3rd 2009

An all out collapse in the grain markets today as funds and producers were large sellers. The wheat market dn 52 cents led the way as the speculative crowd that has dominated the trade lately exited in large quantities relative to their position. Minneapolis wheat did close at limit down 60 cents today. Crude oil ended the day down $2.31 and was down over $3.00 as the ag futures closed. The US dollar was sharply higher today and that also led to the lower grain markets. The weather forecast is confusing as moisture is good for the 95% planted in mostly wet conditions but also may be the final straw in what's left to plant and may force some to switch to soybeans. The USDA report next week may not adjust planted acreage and leave the door open for an exciting June 30th report.

An interesting note to compare the wet spring of this year vs last year, in the June USDA report last year corn production per acre was lowered 5 bushels due to the extreme flooding and late start to planting. It will be interesting to see if bu/ac are also lowered from the 155 that the USDA is using this year.

Funds were sellers of 14,000 contracts of corn leaving them long 200,000, they sold 5000 soybean contracts down to 125,000, and 10,000 contracts of Chicago wheat leaving them 12,000.

Scott Meyer