Corn Market Commentary for 6/29/2010

September Corn finished down 9 at 333 1/4, 9 3/4 off the high and 1/2 up from the low. December Corn closed 8 3/4 lower at 344. This was 9 1/2 off the high and 3/4 up from the low.

Corn maintained its role as leader to the downside among the grains today with the December contract posting its seventh straight loss. This took the December contract to a new contract low and a new contract low close. Corn lost ground sharply to soybeans early in the session, but those spread losses were trimmed into the close. Traders are looking for an increase of 400-500,000 acres in the USDA’s corn acreage number tomorrow morning, and that may have also added to the pressure in corn. The latest 6-10 day forecast calls for above normal temperatures to the east of eastern Minnesota and eastern Iowa and from Kentucky on north. The highest temperatures are expected from Michigan to the north and east. Precipitation is forecast above normal from eastern Indiana on west, and including the entire Mississippi Valley and the Delta. This would include some of the critical pollination period in many major growing areas. However, in the meantime, forecasts call for dry weather with mild temperatures into the start of the holiday weekend. Traders said that fears of a slowdown in economic growth in China and the US could eventually result in reduced fuel usage that could possibly trim expectations of ethanol usage, and possibly trim profit margins for ethanol producers. Basis levels for corn at the Gulf were steady to firm this morning on the weak start in futures.

September Rice finished 0.22 lower at 9.99, 0.01 off the high and 0.82 up from the low.

Wheat Market Review Report for 6/29/2010

September Wheat finished down 8 at 457, 7 2 up from the low and 3/4 off the high. December Wheat closed down 8 1/2 at 485 1/4. This was 1 3/4 up from the low and 7 off the high.

December wheat participated in a broad sell off in equity and commodity markets today, making an initial low for the day to start the day session followed by a minor new low prior to the close. The selling was credited to outside market pressure, including a higher dollar, along with a very favorable harvest weather forecast through the end of the week in both soft and hard red winter wheat areas. However, the 6-10 day forecast calls for above normal precipitation in the Plains and in the western soft red winter wheat belt. Feed millers in the Philippines are tendering for 25,000 tonnes of feed wheat on an otherwise light day for wheat-specific news. Traders are looking forward to tomorrow morning’s Planted Acreage and Quarterly Grain Stocks reports. They expect spring wheat acreage to be down by just over 150,000 acres from the March Planting Intentions report. Wheat stocks are expected to be up nearly 280 million bushels from last year’s total of 657 million.

December Oats ended 9 1/2 lower at 253. This was 1/4 up from the low and 13 3/4 off the high.

Soybean Complex Market Review for 6/29/2010

August Soybeans finished down 9 at 931 1/2, 14 3/4 off the high and 1 1/2 up from the low. November Soybeans closed down 6 1/2 at 912. This was 5 1/4 up from the low and 12 off the high.

August Soymeal ended down 2.1 at 281.2. This was 2.2 up from the low and 4.3 off the high.

August Soybean Oil ended 1.01 lower at 36.1, 1.07 off the high and equal to the low

November soybeans traded in seesaw fashion today, albeit with a lower bias. This started with a sharp drop to start the day session that took the November contract below yesterday’s lows. Prices quickly rebounded to higher on the day, but then sagged over the remainder of the session before finishing near yesterday’s lows. Meal gained on oil again today, although it gave back some of its gains on a late sell off. Soybeans gained sharply on corn early in the session, but those gains were also trimmed into the close. Traders credited the early weakness in soybeans to the strong consensus for a dry forecast in the Midwest for the remainder of this week, along with a very negative set up in outside markets. Temperatures are expected to rise into the weekend on a push of warm air from the west and SW. Japan’s Ministry of Agriculture reported today that the country plans to import 3.44 million tonnes of soybeans in 2010. This is up 1.5% from last year. Traders are looking for a marginal increase in soybean acreage on tomorrow’s Planted Acreage report from the 78.1 million acres projected in March. June 1st Quarterly stocks are expected to fall just below 600 million bushels, just below the June 1, 2009 stocks which came in at 596 million.

With today’s analysis mostly about weather and the Grain Stocks and Planted Acreage reports, traders might want to take a peek at the commercial traders momentum.  The Commercial Trader momentum can be tracked by using the Commodity Futures Trading Commission Commitment of Traders reports.  Our idea is that, in a value driven commodity futures market no one knows fair value like the people who produce it or, have to use it.  In fact, it is precisely their sense of value that provides the commodity market’s rhythmic meanderings that swing traders love so much.  Let’s face it, producers know when their product is overvalue and it should be sold just as well as end line users know when they should be stocking up at low prices.  Therefore, trader should be able to incorporate this valuable information into their commodity trading system.

This blog is reported by Andy Waldock.  Andy Waldock is a financial advisor, analyst, broker, asset manager and traderfor Commodity & Derivative Advisors, located in Sandusky, Ohio.  As a result, Andy Waldock may have positions for himself, his family, or his clients in any commodity future market discussed. The blog is meant for educational purposes and to develop a dialogue among those with an interest in the commodity future markets. The commodity markets employ a high degree of leverage and commodity trading  may not be advisable for all investors.   There is considerable risk in investing in commodity futures.  If you are interested in reading other circulated articles, commenting  on his writings or subscribing to Andy’s blog, please visit http://blog.commodityandderivativeadv.com.

The daily commentaries provide an analysis of the factors that influenced price activity, a recap of any reports released that day, a recap of each commodity’s traded price activity, and a look ahead at the next day’s schedule.  CME Group provides market commentaries for corn, wheat, soybeans, gold and silver.