Friday May 29th, 2009

A tumbling U.S. dollar drove gains Friday in corn futures, which ended at new recent highs. July corn ended up 7 1/2 cents to $4.36 1/4 per bushel, and December corn ended up 7 cents to $4.59 1/4. For the week July Corn gained 19 cents for the week while Dec corn gained 20¾ cents. For the week, July Beans gained 53½ cents and November gained 86¾ cents. The market climbed early on technical buying and support from the weaker dollar and stronger crude oil. "Looking at a chart of crude oil and the U.S. Dollar show an exact inverse relationship to each other and pretty well explains the market today," according to one trader. Trouble getting the crop into the ground in the eastern U.S. Corn Belt remains a concern of the market.

Most expect planting progress to be around 91% to 92% in Monday's crop progress report from the U.S. Department of Agriculture. Commodity funds added to their long positions in corn and soybeans and trimmed their net short position in wheat, reflecting a bullish attitude about agriculture futures, according to the Commitment of Traders report released today. Funds are currently long just over 104,000 contracts of corn and long about 89,000 contracts of soybeans.

U.S. soybean export sales have exceeded the government's full-year forecast three months early, setting the stage for a broadly expected upward revision in the government's projection. Strong demand from China, the world's top importer, pushed the year-to-date sales for the current marketing year that ends Aug. 31 to 1.2405 billion bushels, just above USDA's latest forecast for 1.24 billion bushels.

~Have a good weekend

Thursday May 28, 2009

Corn futures closed higher on Thursday on fund buying and on a rally in wheat futures. Funds bought 7,000 corn futures contracts during the session. Wet weather may continue to slow crop plantings in Illinois and Indiana with better seeding weather elsewhere. Planting delays in key areas of the U.S. Corn Belt this spring could lead to tight supplies of corn during the next year, forcing prices higher and further threatening profit margins at ethanol plants and livestock companies. The slow pace of corn planting east of the Mississippi River, including major production states such as Illinois and Indiana, could cut ending stocks by as much as 35 percent, according to one analyst.

Investment funds poured money into agricultural markets on Thursday, taking U.S. wheat to four-month highs amid a broad rally in other commodities. Gold prices hit two-month highs and silver nine-month peaks as funds also piled into precious metals to hedge against a weaker dollar.

U.S. soybean futures on the ended mixed on Thursday, with the nearby months pressured by profit-taking after this week's surge to an eight-month high above $12 a bushel, traders said.

Wednesday May 27, 2009

Grains today closed mixed in chicago. With corn losing only marginally yet ignoring sharply higher wheat values. Soybeans adding minimal gains in old crop and 7 cents in new. The Dow Jones losing 173 pts, Crude Oil gaining a modest $1/barrel, and the U.S. Dollar Index showing some bottoming action around 80pts.

Corn is caught technically range bound between the 20 day moving average being support@ 4.40 and 4.56 resistance basis December Futures. Fundamentally, the argument continues... Are the planting delays a problem? As far as the market is concerned, the corn crop in theory is planted. Thus, is rain bearish?? Though many see crude oils target price now in the mid 70's/barrel. Lending to some longer term support as usage is reported to be picking up next year.

Soybeans are being limited especially in old crop today as basis values are somewhat retreating. This prompting some liquidation in the July/Nov Soybean bull spread. Possibly, linked to US led military intervention with North Korea in which could limit some Asian Soybean business.

Jeff Neisler

Tuesday May 26th, 2009

USDA Planting Progress out today due to holiday yesterday.
U.S. Corn 82% vs. 62% last week with Iowa 97%, Illinois 62% vs 20% last week and 85% last year, and Indiana 55% as of Sunday.
Range of estimates were 80-85% so should be considered supportive to prices tonight.

Soybean plantings for U.S. 48% vs 25% last week with Iowa 80%, Illinois 12%, and Indiana 25% done.

The stock market had a nice rally today based on "consumer confidence" going up amid all the bad financial reports and the impending General Motors bankruptcy.

Old crop soybeans again led the markets higher closing up 19.5 cents as chatter of China looking to buy 1-2 cargo ships of soybeans from Brazil and crude oil futures bouncing back from $2.00 lower overnight to 60 cents higher supported the markets.

Weather this week looks favorable for getting corn and soybeans finished.

Scott Meyer