Closing Grain Commentary 6/24/10
Jun 24, 2010
The corn and bean market struggled once again today while the Chicago Wheat contract finished slightly higher. This morning brought us a Census Crush report as well as our weekly export sales numbers. Corn sales came in at the high end of the estimates but this wasn’t enough to help the corn market finish higher as the July contract settled 1 ¾ cents lower at $3.44 3/4. The forecast still remains favorable for crop development for the majority of the corn- belt. We will continue to monitor the dry weather that has been reported throughout China and the Delta. Tomorrow is option expiration for the July options. If you still have July options on please get in touch with your broker to see what the best strategy going forward will be. We are very comfortable with the hedges that we have in place for both 2010-2011 and also the start that we have for 2011-2012. If you feel that you need to get caught up with any of our recommendations or simply would like to add additional protection as we progress through the summer, please give us a call.
The soybean market saw a strong a session of bull spreading as the July Nov spread settled the day 9 cents higher at 43 ½ cents. This caused November beans to settle the day 11 ½ cents lower at $9.12. This morning’s Census Crush number was better than the estimates but continued to decline relative to last month’s number. The trade estimates for the Census report were for 133.2 mil bu and the final report came back at 133.7mil bu. Last month’s crush was 136.5 mil bu. The last few months we have continually seen disappointing crush numbers and the bean market has suffered as a result. In our opinion, producers that still need to catch up on bean sales should have working orders from here to $9.50. With a strong South American crop and the great start that we have seen throughout parts of the Midwest these are levels that need to be protected. Soybean sales came in at 541,300 which was better than expected. Even with good sales beans managed to break into the close. This is a bearish sign so if you are not caught up on sales and need to get orders placed, please give us a call to discuss the available strategies.
The Chicago wheat market was the strongest of the three grains during today’s trading session. Much of this strength can be attributed to the strong export sales number this morning. This is the second week in a row of strong sales and gave the market enough confidence to hold support in the Chicago wheat. The July contract settled ¾ higher at $4.63. Lately we have been discussing the fact that wheat has been up against terribly bearish fundamentals. With that being said we feel that if corn were to hold these levels and not experience another sizable break wheat may have put in a low. However, if we were to see another strong break in corn, wheat can’t help but feel the pressure and would also have difficulty sustaining a rally. From a producers standpoint if you are able to store your wheat, we feel selling deferred futures to capture the carry is a wise play in this market. Tomorrow mornings export sales guesses for wheat are between 250,000mt-450,000mt. As always, if you have any questions please do not hesitate to give us a call and we can go over your individual operation with you.
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