Corn Market Analysis for 6/25/2010
September Corn finished down 4 1/4 at 349 1/2, 5 1/2 off the high and 1 up from the low. December Corn closed down 4 at 360 1/2. This was 5 1/2 off the high and 1 up from the low.
December corn saw 2-sided trade to start the day session with a lower open and a modest recovery into mid session. Prices then eased back to the morning lows into early afternoon followed by a break to below yesterday’s lows prior to the close. Traders said that a dry forecast that extends into the 6-10 forecasts is allowing saturated fields in parts of the Midwest to dry out. The temperature outlook ranges from normal to slightly below normal into next week with some longer term forecasts calling for above normal temperatures in the 6-10 day time-frame. The US corn crop faces early pollination in some areas with one analyst pointing out that substantial portions of the Corn Belt may complete pollination by early July. Much of the US crop was planted early this year, but rains in early May delayed planting in other areas which could end up stretching pollination out over many weeks. Very high temperatures during pollination have a detrimental effect on yield, particularly if they remain hot at night.
September Rice finished down 0.13 at 10.21, equal to the low and 0.02 off the high.
Wheat Market Commentary Report for 6/25/2010
September Wheat finished down 6 1/2 at 471, 3/4 up from the low and 8 1/4 off the high. December Wheat closed down 6 3/4 at 497 1/2. This was 3/4 up from the low and 8 1/4 off the high.
December wheat sold off to start the day session and then traded near the early lows into early afternoon before making a final push to new lows prior to the close. The late push took the December contract to its lowest level since June 16th. This weakness came despite ongoing erosion in the dollar that extended through the close of the grain session. Traders blamed today’s weakness on drier weather in the Plains and the Midwest which is causing the winter wheat harvest to advance in those areas. The weather forecast is also generating an improved outlook with regard to quality issues in the soft red winter wheat crop. Traders also cited profit taking ahead of the weekend as a factor in the morning sell off. Chicago gained on both KC and Chicago wheat today. Those markets had benefited most price-wise from heavy rains and reduced planted acreage in Canada, and one analyst said that today’s selling was profit taking as the wetness in Canada is getting to be old news. Spreaders were moderately active in inter-commodity spreading including buying in Chicago versus selling in KC and Minneapolis wheat.
December Oats closed down 13 1/2 at 263. This was 2 up from the low and 17 3/4 off the high.
Soybean Complex Market Review for 6/25/2010
August Soybeans finished up 1 1/4 at 941, 5 3/4 off the high and 1 1/2 up from the low. November Soybeans closed unchanged at 912. This was 1/2 up from the low and 7 3/4 off the high.
August Soymeal closed up 0.5 at 280.3. This was 1.5 up from the low and 1.2 off the high.
August Soybean Oil finished unchanged at 37.33, 0.27 off the high and 0.05 up from the low.
The old crop soybean contracts managed to eke out marginal gains today while November closed unchanged despite losses in wheat and corn. Oil and meal saw fractional changes. This left old crop/new crop soybeans spreads and meal/oil spreads relatively flat on the day. Traders said that the modest support came from a day-long break in the dollar, while pressure came from a drier forecast that is very welcome in a rain-saturated Midwest. Traders said that evening up ahead of the weekend was also a major factor today. Some forecasters are calling for an increased chance of rain in dry areas of the Delta into next week if the tropical depression that is currently in the Caribbean develops into a tropical depression and moves north into the Gulf of Mexico as expected. However, there is considerable disagreement as what the direction of the storm will be if it does enter the Gulf.
With today’s recap mostly about weather, 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.
Andy Waldock circulates this blog. Andy Waldock is a financial advisor, trader, analyst, broker and asset managerfor Commodity & Derivative Advisors, located in Sandusky, Ohio. Therefore, Andy Waldock may have positions for himself, his family, or his customers in any commodity future market reviewed. 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. Investing in the commodity futures could result in substantial risk. 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 review of each commodity’s traded price activity, and a look ahead at the schedule for the next day. CME Group provides market commentaries for wheat, soybeans, corn, gold and silver.
