Corn and wheat rally, soybeans sag 7/27/09

Published on: 17:27PM Jul 27, 2009
Sep 09 Corn
322 ¼  
+ 6
Dec 09 Corn
333 ¾
+ 6 ½ 
Aug 09 Beans
1021 ¼  
+ ¼  
Nov 09 Beans
- 8 
Sep 09 Wheat
+ 3 ¾
Sep 09 KC Wheat
551 ¾ 
+ 2 ¾
Sep 09 Min Wheat
+ 3 ½
Dec 09 Meal
- 3.1
Dec 09 Oil
- 0.35

Corn and wheat closed higher and soybeans closed lower. A mostly favorable weather outlook pressured corn and soybeans early. A strong weekly export figure for corn and the expectation of a lower acreage estimate on the August 12th report helped corn rally today. Corn basis levels remain firm as export business remains strong and the farmer remains reluctant to sell. We could see basis levels break during August as the farmer sells his remaining old crop bushels ahead of harvest. However, if prices remain around $3/bushel or lower, we will likely see the farmer hold on to new crop bushels. This should keep basis levels relatively strong after harvest. Corn has broken the hardest over the past month and we could see corn gain on wheat and soybeans as we head into the August report. The funds are still long soybeans and short corn and wheat. Lower than expected weekly soybean exports and the expectation of increased acres could continue to cause some unwinding of this spread. Crop ratings came in as expected with soybeans unchanged at 67% good-to-excellent and corn down 1% at 70% good-to-excellent. The extended outlook still looks favorable for most areas. As long as this continues, corn and soybeans should have a hard time maintaining large rallies.  However, with both crops still lagging in maturity the market will be very touchy once we get closer to October. An early frost would certainly hurt the crops in several areas, so the “fear” of an early frost could give us several good selling opportunities over the next two months. October is still 2 months away; so waiting to see if we have an early frost is not a good marketing strategy. If you are hesitant to make sales for this reason, give us a call and we can discuss some strategies to help take advantage of a “frost” rally this fall without having so much downside risk.
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