Friday, July 11, 2009

Corn and beans put in an up and down session today with both closing modestly lower. The main feature today was the July USDA Supply and Demand report, the first report to incorporate the June 30 planted acreage estimates. The updates this morning were a bit negative as USDA made upward revisions in U.S. corn stocks forecasts with wheat supply increased as well. As expected USDA increased the 2008/09 and 2009/10 carryout estimates for corn with 2009 now estimated at 1.770 billion bushels and 2010 1.550 compare to 1.600 and 1.050 respectively last month. The old crop carryout estimate is larger than expected as USDA took 100 million bushels off of both Feed and Industrial usage reflecting the poor economics faced by the livestock and ethanol sectors for much of the past 6 months. The USDA is estimating the 2009 corn crop at 12.290 billion bushel, a number that no one seems to be comfortable with, eastern corn belt producers feel the 153.4 bpa estimate is too high while western belt producers feel it is 5 bpa too low! There will be many revisions to come obviously but the current feeling is that corn stocks will continue adequate for the next year at least.

The USDA took the conservative approach in this month's soybean revisions, leaving old crop 2009 stocks unchanged at 110 million bushels despite a 10 mbu increase in exports and a 5 mbu increase in the domestic bean crush estimate. The 15 mbu increase in demand was offset by a 15 mbu decrease in residual usage. With residual usage still estimated at 59 mbu don't be surprised if USDA finds a way to keep carryout unchanged in Aug. and Sept. even if the export pace continues strong for the season as it currently has been. For the new crop balance table USDA is now estimating a comfortable 250 mbu, up 40 mbu from a month ago. USDA did not make many changed in world soybean S&D numbers this month.

Phil Farrell

Thursday July 9th, 2009

Both corn and soybeans finished the day higher with support from the outside markets and technical bounce after the steep loses the market has experienced as of late. Weekly export sales were strong which also helped to add support along with a weakness in the dollar. The USDA will be releasing their monthly crop production report with most analyst predicting an increase in yield by a couple of bushels on corn. Weather forecast show some heat entering the corn belt but is expected to exit by mid to late next week.

~Chuck Peterson

Wednesday July 8, 2009

Grains in Chicago closed on a week note today on follow through selling. With weather forecasts being mostly benign. Crude oil extremely weak today down $2.79/barrel.

Corn caught in a downdraft of fund liquidation did score a new daily low today. Trade contemplating the effect of a possible yield as high as 160.acre. Most traders are not looking for much of any support until the 3.00 level basis December Futures. Estimates for Fridays USDA report are carryout at 1.567 billion bushels up sharply from June USDA at 1.09 billion bushels.

Soybeans caught in futures and basis depreciation resulting in double hits to cash as cash soybeans have fallen dramatically. This started with soybean meal basis depreciation at the end of last week. The market is getting tired. Estimates for USDA carryout on new crop are at 229 million bushels vs. 210 million in June USDA report.

Jeff Neisler

Tuesday July 7th, 2009

A very rough day in the grain markets as fund players and those with corn/soybean spreads pushed the markets lower. The entire soybean complex seems to be folding as the weather and issue of large acres hangs over the market. Old crop soybean cash bids, with the the weaker basis today were down 74 cents while corn lost 9 cents on the board but did manage 2 cents better basis at the end of the day.

Crop conditions were a little supportive overnight to corn and soybeans but quickly gave way today of a limit down soy meal complex and sharply lower soy oil. Since we are in July, the July soybean futures has no limit and they were down 81 cents at one time today. Corn futures were up 6 cents with only 1/2 hour of trading today but were hit hard in the closing 10 minutes.

July weather seems to look non-threatening with warmer weather into the weekend but it won't last long in much of the Midwest. Western corn belt states will begin pollinating at the end of the week and some have already.

Scott Meyer

Monday July 6th, 2009

Doubts about the U.S. economic recovery hit commodities hard on Monday sending corn down another 11 to 15 cents and soybeans down 35 to 43 cents, with crude oil losing over $2.50 dollars/barrel. Crop Progress report out tonight pegging corn ratings at Corn Conditions 71% this week vs. 72% last week, 62% Last year, and soybeans at 66% TW vs. 68% LW, 59% LY.

Good crop weather in the U.S., along with a firmer dollar, and falling crude oil prices weighed heavily on both corn and soybean futures. Funds sold 9,000 contracts of corn today and 3,000 contracts of soybeans. Weather across the Midwest remains mostly favorable for crop development. Most crop areas will see rains at one time or another over the next two weeks. There will be a brief period of warming that occurs later this week into the weekend, which will bring above average temperatures for a few days.

Chris Spurlock