Friday July 17th, 2009

A slight bounce today in all 3 markets as we head into a weekend and upcoming next week forecast that continues to show below normal temperatures. Funds were the big story this week as they sold with reckless abandon and could very well be looking to liquidate the remaining 75,000 contracts that they are long as the summer rolls along. Scattered showers have made wheat harvest hit and miss with so far, good yields and descent test weights.

The Chicago Board of Trade continues to tussle with lower growing degree units vs historically high yields with such cool temperatures. Crop conditions will be out Monday afternoon and it will be interesting to see if they start to drop with a few dry areas in Minnesota and Wisconsin popping up and lack of heat in every other state affecting conditions. Any guesses as to where the attached picture of corn was taken? How about Brazil!!

Scott

Thursday July 16th, 2009

Ideal weather and an optimistic crop outlook took another chunk out of corn prices Thursday, as the nearby month set a new contract low. The Midwest's moderate temperatures and ample rainfall are the main influence in the market currently, analysts say. Corn futures appear poised to move lower amid slumping domestic demand and signs that a bumper crop in the United States is growing even bigger. But sinking prices could stimulate demand, which could limit corn's bearish impact on other grains traded at the Board. Those in the bullish camp see higher prices at year-end and expect continued strong demand for grains, an improved global economy and a rally in crude oil futures to support grain and soybean prices.

Soybean futures tumbled Thursday, backpedaling on speculative selling amid bearish crop weather and news of China releasing supplies out of their strategic reserves. August soybeans ended 44 1/2 cents lower at $9.76, and November soybeans finished 14 1/2 cents lower at $8.90. Speculative fund selling was estimated at 5,000 lots in soybeans.

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Wednesday, July 15, 2009

The corn market opened higher today, following a surging crude oil market and a weaker US$ but then succumbed to selling pressure on the news that Tyson Foods would be reducing its hog herd by 28%. The Tyson news would dramatically curtail their corn usage and likely won't be the last of such announcements. Overall crop growing weather is good with no significant heat forecast for the corn belt and generally ample moisture available. Overall ideas of good crop conditions are overshadowing the areas of the belt that have had late development and need an extended growing season to catch up. On the export front, business seems to continue and we could see USDA increase the export forecast in the next report, helping to cut in to the significant carryout.

Much like corn, soybeans turned lower after the Tyson news with fund selling contributing to a $.14 loss on the close. There were several rumors today that China was going to auction off some of the soybean stocks they have been building but no confirmation. What was confirmed today was another 115,000 ton sale of old crop beans to China for August shipment. It doesn't seem to make sense that they would buy beans only to put out an auction to buy excess stocks. At this point if China continues to be in the market for U.S. beans we will likely see another increase in the old crop bean export estimate, leading to interesting ramifications for the tight old crop stocks situation. So far the continued sales have not been able to offset the bearish new crop situation with thoughts of good crop potential and increased acres for South America this fall.

Phil

Tuesday July 14th, 2009

Commodity markets seem to be finding some support finally this week. With outside markets neutral to negative corn finished up 6 cents and beans 16. Crop conditions last night continue to tell the story of a descent to good national crop and a below average nearby crop. With half of the corn belt pollinating in the next 2 weeks, the 8-14 day temperatures look to be below normal and that with very few drought areas should get most of that corn pollinated nicely. Illinois is 5% below last year's corn crop condition but Iowa is 21% better. Illinois was 11% silked vs Iowa at 6% with averages being 48% and 11% respectively for this time of year.

Corn basis continues to amaze with the river market bidding +.17 in Morris and Corn Products at +.26 for July. With the lack of farmer movement due to subdued futures, the basis has gone beyond the normal values to try and procure grain.

Soybean basis has also been volatile as have the futures market. Soybean ratings for the nation are 7% better than last year with Illinois 1% worse and Iowa 19% better. Frost discussion should support new crop values and export inspections on already sold soybeans should be the deciding factor to where old crop carryout finishes out.

Scott Meyer

Monday July 13th, 2009

Corn futures closed higher on Monday on a rebound from oversold technicals and a unwinding out of the beans to corn ratio spread. Favorable crop weather continues in the U.S. Midwest corn belt with only slight occurrences of hot weather, which will be mostly confined to the west and south. Basis continues to improve through the region as producer selling remains extremely light. Good to excellent ratings on corn steady this week at 71%, compares to 64% LY. Soybean shed 1% in good and gained 1% in excellent to stay unchanged at 66% good to excellent.

Chris Spurlock