Corn, Wheat, Soybean Complex Market Commentary for 08-19-10
Sunday, September 5th, 2010Wheat Market Analysis Report for 08-19-10
September Wheat finished 25 1/4 higher at 681 1/4, 18 3/4 off the high and 24 1/4 up from the low. December Wheat closed up 25 1/2 at 714 1/4. This was 25 up from the low and 17 3/4 off the high.
December wheat posted a significant gain today following a very strong weekly export sales total and indications that importers may be continuing their recent scramble to replace lost Russian production. This included ideas in Europe this morning that Russia itself will make significant grain purchases in 2010/11. Traders in Europe also note that Ukraine’s decision to put a cap on wheat exports may leave a gap in exportable supplies of low quality wheat. The UN food agency FAO is expected to cut its forecast of the world wheat crop according to an economist with the organization. He noted that it could drop by 5-7 million tonnes from the organization’s previous forecast. Net weekly US export sales for wheat came in at a whopping 1,412,500 tonnes, all for the current marketing year, up from last week’s very strong total of 1,329,700. Egypt was the biggest buyer on the report at 594,000 tonnes followed by Canada and Mexico, although the sale to Canada simply involved a stop at a Canadian port on the St. Lawrence Seaway before the cargoes proceeded to another foreign destination. As of August 12, cumulative US wheat sales stand at 36.7% of the USDA forecast for 2010/2011 versus a 5 year average of 39.5%. Sales need to average 494,000 tonnes each week to reach the USDA forecast. In addition to the US weekly sales, traders reported that Egypt has bought 240,000 tonnes of wheat from Canada and France. There were reports earlier this morning that Iraq was also tendering for wheat, but the Iraqi Grain Board later denied this.
December Oats ended 2 3/4 lower at 287. This was7 off the high and 2 up from the low.
Soybean Complex Market Review for 08-19-10
September Soybeans finished 10 lower at 1035 1/4, 13 3/4 off the high and 9 up from the low. November Soybeans closed down 11 1/4 at 1030 3/4. This was 7 1/4 up from the low and 16 off the high.
December Soybean Oil ended 0.76 lower at 41.45, 1.1 off the high and 0.22 up from the low.
December Soymeal closed up 0.2 at 300.0. This was 3.5 up from the low and 4.5 off the high.
November soybeans saw broad swings today with most of the day spent on the downside. This culminated with a late sell off that stopped short of the early session lows. Soy oil also sold off into the close while managing to hold above the early session lows. Traders said that a cooler weather forecast over the next week to ten days in the western soybean belt helped to pressure the market along with some selling in crude oil. Traders also noted that an improved weather outlook in Russia has helped to take the buying urgency out of the wheat market with this also serving to curb buyers’ enthusiasm in soybeans. The Midwest crop tour is showing an improved yield outlook in Indiana and a somewhat diminished outlook in Ohio with scouts also confirming the presence of Sudden Death Syndrome (SDS) in Iowa. Illinois yields are showing signs of stress from the recent heat wave.
Corn Market Commentary for 08-19-10
September Corn finished down 4 1/4 at 414 1/4, 8 3/4 off the high and 3 up from the low. December Corn settled down 4 at 429 1/4. This was 3 1/4 up from the low and 8 1/4 off the high.
December corn saw mixed to higher price action overnight and into mid morning, but this was followed by a sustained sell off into early afternoon. Corn posted a sharp loss versus wheat on the day in active spreading, but the December 2010 contract posted a modest gain versus the 2011 contract. This week’s big crop tour in the Midwest is reporting yields in central and NE Iowa that are trending higher while yields in nearby Minnesota look near average. The tour is calling for a drop of 2.2% in the Illinois yield versus the 3-year average. This week’s net export sales for corn came in at 594,900 tonnes for the current marketing year and 2,293,700 for next marketing year for an enormous total of 2.88 million tonnes. This was near a 16-year high with the biggest new crop buyers being ‘unknown’, Mexico, Japan and Egypt. As of August 12th, cumulative corn sales stand at 13.9% of the USDA forecast for 2010/2011 versus a 5 year average of 13.4%. Sales need to average 815,000 tonnes each week to reach the USDA forecast. More unwelcome showers are expected in the western Corn Belt tomorrow, although this system is also expected to bring more welcome rain to dry areas in the eastern Corn Belt.
September Rice ended 0.045 higher at 10.795, equal to the low and 0.085 off the high.
After reading today’s commentary,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 future market education.
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The daily commentaries provide a review of any reports released that day, a recap of each commodity’s traded price activity, an analysis of the factors that influenced price activity, and a look ahead at the next day’s schedule. CME Group provides market commentaries for soybeans, corn, wheat, 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.