Soybean Complex, Corn and Wheat Market Recap for 07-30-10

Corn Market Recap for 7/30/2010

September Corn ended  up 13 1/2 at 392 3/4, 1/2 off the high and 14 1/2 up from the low. December Corn settled 13 higher at 406 3/4. This was 1/4 off the high and 13 3/4 up from the low.

December corn pushed above yesterday’s high early in the day session and then added to its gains throughout the remainder of the day session. The market finished near the highs for the day, and today’s close was the highest since July 16th. Funds were said to be strong buyers on the day. Traders said that another surge in wheat and a steady to strong pace in export sales is helping to support the corn market along with the potential for excessive heat in the Midwest into the first half of August. One analyst noted that production concerns for corn are marginal in comparison to wheat, but he added that in a year when the stocks/usage rate for corn is nearing the low end of its range for the past 40 years, even marginal losses can serve to further tighten 2010/11 ending stocks to below 10% of usage. In addition, he noted that the USDA’s 2010/11 export projection at 1.950 billion bushels could easily be bumped higher to replace lost feed exports from the Black Sea. Basis levels for corn at the Gulf were mostly steady this morning.

September Rice endedup 0.415 at 10.555, equal to the low and 0.045 off the high.

Wheat Market Analysis Report for 7/30/2010

September Wheat finished 34 higher at 661 1/2, 35 34 up from the low and 1 1/2 off the high. December Wheat settled up 34 1/4 at 693 3/4. This was 35 3/4 up from the low and 1 1/4 off the high.

December wheat surged overnight and then added to its gains throughout the day session, trading at its highest level since early June, 2009 in the process. The market finished near its highs for the day and gained sharply on corn in active trade by spreaders. Traders report that importers and end users who were not well covered for future needs prior to the start of the rally are now buying to ‘catch up’. Funds were buyers today and some traders will be looking at today’s Commitments of Traders report to see if trend-following funds have continued to be net buyers. These traders were net short by over 77,000 contracts in wheat as of June 15th, and COT reports since then have shown them as consistent large net buyers. Traders note that national policy adjustments have been made by Russia and Ukraine which are expected to curtail wheat exports from the Black Sea region following the drought there. Temperatures hit record highs in some of the region this week with reports of 105-110 degrees. Egypt moved aggressively this week to make it easier for countries other than Russia to bid on its wheat import business. Egypt showed up as a buyer of US wheat on yesterday’s Export Sales report for the first time in many months and Brazil also showed up as a significant buyer. Brazil is the world’s second largest importer of wheat, and they have diverted some of their sourcing from Argentina to Russia over the past year. They too must now find other sources for wheat. December wheat closed up $1.87 1/4 for the month, up 36.9%.

December Oats settled 9 1/2 higher at 284. This was 11 up from the low and equal to the high.

Soybean Complex Market Review for 7/30/2010

August Soybeans ended 25 3/4 higher at 1052 1/2, 26 1/4 up from the low and 2 1/4 off the high. November Soybeans settled up 17 at 1005. This was 2 off the high and 17 1/2 up from the low.

August Soymeal finished 5.5 higher at 310.9. This was 3.1 off the high and 5.9 up from the low.

August Soybean Oil ended 0.56 higher at 39.83, 0.76 up from the low and equal to the high.

November soybeans rallied to its highest level since early January today, surpassing the $10 level in the first minutes of the day session. This was followed by further new highs for the day in late morning and again prior to the close. Traders said that the soaring wheat prices triggered buying by most segments of the market today. The nearby August contracts in soybeans and meal posted the sharpest gains in the complex today. However, meal and oil were both substantially higher in deferred contracts with little change in the spread between those markets in new crop contracts. Weather is expected to be favorable to crop development this weekend in the Midwest, but hot and potentially stressful for soybeans in the Delta. Forecasts into next week and later are potentially a bit more stressful in the Midwest according to traders. Excessive soil moisture in the western Midwest could cause some spot problems according to one analyst with scattered dry spots doing the same in the eastern Midwest. In India, rainfall has increased in central and western growing areas, but sources there report that more rain is needed.

 As mentioned earlier, traders are looking at the Commitment of Traders report.  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.

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.  Market commentaries for soybeans, corn, wheat, gold and silver are provided by CME Group.   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.

Andy Waldock publishes this blog.  Andy Waldock is a financial advisor, trader, analyst, broker and asset managerfor Commodity & Derivative Advisors, located in Sandusky, Ohio.  As a result, Andy Waldock may have positions for himself, his customers, or his relatives in any commodity future market reviewed. The blog is meant to develop a discussion 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 substantial risk in investing in commodity futures.  If you are interested in reading other published articles, commenting  on his publications or subscribing to Andy’s blog, please visit http://blog.commodityandderivativeadv.com, or if you have any questions, please call 1-866-990-0777.