Closing Grain Commentary 6/18/2010

Published on: 15:04PM Jun 19, 2010

The grain market had another week of strength with corn, beans, and wheat all sharply higher.  December corn ended up finishing at 3.80 ½, a 9 ½ cent gain from last Friday.  Nov beans were up 21 ¼ cents and Dec wheat was up 23 ¼ cents from last Friday.  We are coming to the end of the month and end of the 2nd quarter.  This recent strength may be end-of-quarter fund buying and it may also be end-of-quarter commodity dressing.  This could mean further strength than anticipated over the next two weeks. This week's commitment of traders report shows funds net long position increased by about 20,000 beans and 10,000 corn on Wednesday.

Informa came out with its acreage estimates this morning.  Corn was estimated at 89.318 which was a small decrease from their May number of 89.6.  Beans were at 78.845, an increase from 78.5.  Wheat was slightly higher at 53.75 from 53.6 previously. This week's USDA export sales numbers were good for corn and wheat but negative for old crop soybeans.  With the rally today we were able to get our recommendation filled to sell an additional 10% of 2010 corn at $3.84 (Dec Futures.)  If you still need to get caught up on this recommendation please call you broker.  The mid-day weather run showed an increase in precipitation for the Northern Midwest for Sunday - Tuesday.  Otherwise conditions still remain favorable for the majority of the corn-belt.

Looking ahead to next week we could see more strength as we approach the June 30th report and the end of the quarter. The Stats Canada report comes out on Wednesday at 7:30am.  The report is data compiled from a survey of farmers which was taken before the weather impacted much of that region, so it may not reflect this weather.  If you are not caught up in sales, having your orders placed could be a way to capture any quick/sharp rallies in the market. Please call your broker if you would like to go over your current positions or any recommendations.

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