07-09-2010 Grain Market Commentary
Corn Market Analysis for 7/9/2010
September Corn finished down 2 at 383 1/2, 3 off the high and 2 1/2 up from the low. December Corn closed down 1 at 395 1/4. This was 3 up from the low and 2 3/4 off the high.
December corn pushed above yesterday’s high into mid day today, despite a lower start that was blamed on a supply and demand report from the USDA that was viewed as negative. However, the market failed to take out the May high and then spent the remainder of the session trading on both sides of yesterday’s close. Traders said that the USDA supply and demand report and a somewhat weaker than expected export sales total for corn contributed to the sell side while support came from buying by spreaders versus wheat. Today’s supply and demand report pegged 2009/10 corn ending stocks at 1.478 billion bushels, down from 1.603 billion in June. This was above trade expectations near 1.4 billion. 2010/11 ending stocks are now pegged at just 1.373 billion bushels from 1.573 billion last month and compared with trade expectations near 1.3 billion. Stocks/usage for 2010/11 comes in at 10.2% which is considered relatively tight. Exports were revised lower by 50 million bushels to 1.950 for 2010/11. World corn ending stocks were revised down by near 6 million tonnes from last month to 141.08 million. China supply/demand numbers were left unchanged. This week’s net export sales for corn were 501,200 tonnes for the current marketing year and 324,800 for next year for a total of 826,000. Japan was the biggest buyer in old crop followed at some distance by China and Egypt.
September Rice finished down 0.015 at 9.985, 0.015 off the high and 0.235 up from the low.
Wheat Market Recap Report for 7/9/2010
September Wheat closed down 10 1/2 at 538, 8 1/4 off the high and 5 1/2 up from the low. December Wheat finished down 10 1/2 at 566 1/2. This was 5 1/2 up from the low and 8 1/2 off the high.
Wheat was the leader to the downside among the grains today following Crop Production and supply and demand reports from the USDA that were considered negative. Prices remained below yesterday’s high throughout the day in the December contract, although the market did manage to pull back from its lows into the close. The USDA lowered production for Canada, the EU and the Former Soviet Union as expected, but US production was raised above trade expectations with the all-wheat yield up an unusually strong 2 bushels per acre for so late in the harvest. This bumped all-wheat production to 2.216 billion bushels from 2.067 in June which was more than 50 million bushels above trade expectations. US ending stocks for 2009/10 were pegged at 973 million bushels with 2010/11 ending stocks 1.093 billion compared to 991 million on the June report. Canada was lowered 4 million tonnes to 20.5 million. The EU was lowered just over 1 million tonnes to 141.82 million. The former Soviet Union was lowered by 7.5 million tonnes with Russia down by 4.5 million and Kazakhstan down by 3 million. China was increased by 2.5 million tonnes to 114.5 million. World production was lowered by about 7.5 million tonnes to 661.07 million. World ending stocks were dropped to 187.05 million tonnes from 193.93 million in June. This week’s export sales were above trade expectations at 513,600 tonnes.
December Oats closed up 7 3/4 at 271 1/4. This was 10 up from the low and 3 3/4 off the high.
Soybean Complex Market Review for 7/9/2010
August Soybeans closed up 10 1/4 at 993 1/4, 4 1/2 off the high and 15 up from the low. November Soybeans finished up 7 1/4 at 953 1/4. This was 13 1/2 up from the low and 5 1/2 off the high.
August Soymeal closed up 3.3 at 300.9. This was 3.3 up from the low and 1.7 off the high.
August Soybean Oil finished up 0.51 at 37.5, 0.11 off the high and 0.63 up from the low.
November soybeans made a new high for the move today, closing at the highest level since May 5th. Meal and oil were also higher, and the nearby July soybean contract posted a strong gain versus deferred contracts. The USDA announced a sale of 116,000 tonnes of soybeans to China today for delivery during the 2010/11 crop year. Today’s July supply and demand report from the USDA was viewed as somewhat negative. The USDA pegged the 2009/10 soybean ending stocks at 175 million bushels as compared with trade expectations under 170. Ending stocks for 2010/11 were unchanged at 360 million bushels. Yield was also left unchanged and production revised higher by 35 million bushels due to higher acreage that reflected the June 30th Planted Acreage report. The USDA also raised exports by 20 million bushels and raised crush demand by 5 million. World ending stocks for the 2010/11 season are now expected to reach a record high 67.76 million tonnes from 66.99 million last month and 65.35 million this year. The USDA still has Brazil production down 4 million tonnes from this year while some private forecasters have production up 2-3 million tonnes for the coming season. This week’s export sales were above trade expectations in soybeans, in line for meal and below expectations in oil. China was the biggest buyer in soybeans with 240,500 tonnes bought for old crop and 360,000 tonnes for new crop.
After reading the corn, wheat and soybeans review, 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 circulated 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 relatives, or his customers in any commodity future market reviewed. The blog is meant to develop a dialogue and educate those with an interest in the commodity future markets. The commodity markets employ a high degree of leverage and commodity trading may not be appropriate for all investors. There is considerable risk in investing in commodity futures. If you are interested in reading other published 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 review of each commodity’s traded price activity, and a look ahead at the next day’s schedule. CME Group provides market commentaries for wheat, soybeans, corn, silver and gold. The information in the Market Commentaries was obtained from sources believed to be reliable, but we do not guarantee its accuracy. Neither the information nor any opinion expressed therein constitutes a solicitation of the purchase or sale of any futures or options contracts
No tags for this post.
Tags: 
Loading ...