Monday June 14th, 2010

Corn futures rallied Monday, climbing near 2-week highs on fresh export demand, Chinese weather concerns and borrowed strength from other markets. The confirmation of new sales of U.S. corn to China provided a fundamental boost for prices, with concerns that dry conditions in east-central China could raise the prospects for additional China purchases attracting buyers. USDA released their weekly Crop Progress report tonight, corn improved 1% to 77% good to excellent. Outside markets continue to be supportive with crude oil up a $1/bbl today and the dollar down again today. Concerns are starting to develop that low quality wheat this year will compete with corn and cause it to remain at lower levels in order to stay competitive.

Soybean futures climbed today, rallying to 1-month intraday highs on support from a sinking U.S. dollar, and advances in broader markets. Outside financial markets provided a spark to attract buyers, as optimistic outlooks for the global economy made some investors less risk sensitive. The July future rose to its highest point since May 14, with technical buying accelerating advances once the contract eclipsed resistance at the June 4 high. Meanwhile, underlying strength was noted from concerns about seeding problems for Canadian canola.