Soybean Complex, Corn and Wheat Market Commentary for 8-25-10
Corn Market Recap for 8-25-10
September Corn ended 1/2 lower at 404 3/4, 4 off the high and 4 1/2 up from the low. December Corn ended 1/2 lower at 420. This was 4 1/2 up from the low and 4 off the high.
December corn closed the day with a fractional gain after trading on both sides of yesterday’s close during both the overnight and day sessions. Traders said that corn found support from buying by spreaders versus wheat which posted a sharp loss on the day. They noted that late support also came from a recovery rally in crude oil. Weather is expected to be dry and cool through the end of the week, with Thursday’s temperatures expected to be below normal in most of the Midwest and well below normal from the north central Midwest into Arkansas. Outside markets were a mixed factor this morning with traders also citing a sharp drop in wheat and a slight cooling in export demand as negative or limiting factors. The Energy Information Administration’s weekly report showed ethanol production for the week ending August 20th averaging 835,000 barrels per day. This is down 25,000 barrels per day (-2.9%) from last week and up 108,000 barrels per day (14.8%) versus last year. Corn used in last week’s production is estimated at 87.675 million bushels. This crop year’s cumulative corn used for ethanol production for the 2009/10 crop year is 4.34 billion bushels versus the 4.5 billion bushels projected by the USDA. The 2009/10 crop year ends on August 31st. Corn use needs to average 135.988 million bushels per week to meet this crop year’s USDA estimate.
November Rice settled up 0.01 at 11.535, 0.035 up from the low and equal to the high.
8-25-10 – Wheat Market Recap Report
December wheat broke sharply today, finishing near the lows of the day. This pushed the December contract to its lowest level since August 18th. Wheat lost ground sharply to corn which posted fractional losses. Traders said that a number of factors contributed to the sell off including disappointment that US wheat was again not included in the latest wheat purchase by Egypt. A higher dollar and rains in Russia were also considered negative price influences. Egypt bought 240,000 tonnes of wheat today with origins reported to be Canada and France. This is for delivery in early October. The UN Foreign Agriculture Organization estimates that floods in Pakistan have affected 3.2 million acres of cropland, or about 14% of the total area. The greatest loss may have been in rice which the FAO cut by 3 million tonnes. Officials in Kazakhstan said today that they plan to buy between 2.0 and 2.5 million tonnes of wheat from domestic farmers as a hedge against domestic food inflation.
September Wheat finished down 27 at 647 3/4, 1 1/4 up from the low and 35 off the high. December Wheat settled 27 1/4 lower at 680 1/2. This was 1 1/4 up from the low and 35 3/4 off the high.
December Oats ended unchanged at 274 1/2. This was 1 1/2 off the high and 4 1/2 up from the low.
Soybean Complex Market Review for 8-25-10
November soybeans traded on both sides of yesterday’s close today before settling unchanged on the day with meal posting a substantial gain over soy oil in the December contracts. November soybeans took out its previous day’s low for the 8th straight today. Weather is expected to be dry and cool through the end of the week, with Thursday’s temperatures expected to be below normal in most of the Midwest and well below normal from the north central Midwest into Arkansas. Outside markets were a mixed factor this morning with traders also citing a sharp drop in wheat and a slight cooling in export demand as negative or limiting factors. Export capacity at the Gulf is said to be fully booked through as late as mid November with early harvest getting underway. Ohio and Indiana have dry spots that could use some moisture on later-developing fields and the northern Delta (Arkansas) is extremely dry with little rain in the forecast there as well.
November Soybeans finished unchanged at 999, 6 3/4 off the high and 5 1/2 up from the low.
December Soybean Oil ended down 0.34 at 39.72, 0.04 up from the low and 0.48 off the high.
December Soymeal closed up 2.3 at 292.0. This was 3.6 up from the low and 1.5 off the high.
After reading today’s recap,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.
The daily commentaries provide a rundown of each commodity’s traded price activity, an analysis of the factors that influenced price activity, a recap of any reports released that day, and a look ahead at the next day’s schedule. CME Group provides market commentaries for corn, wheat, soybeans, gold and silver. 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 circulates this blog. Andy Waldock is a financial advisor, analyst, broker, asset manager and traderfor Commodity & Derivative Advisors, located in Sandusky, Ohio. For that reason, Andy Waldock may have positions for himself, his relatives, or his customers in any commodity future market discussed. The blog is meant for educational purposes and to develop a discussion among those with an interest in the commodity future markets. The commodity markets may not be appropriate for all investors due to the high degree of leverage. There is considerable 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.