EHedger Closing Grains Commentary 7/20/09

Published on: 16:50PM Jul 20, 2009
Sep 09 Corn
323 ¾  
+ 1 ½ 
Dec 09 Corn
+ 2 ½ 
Aug 09 Beans
+ 22 ½  
Nov 09 Beans
920 ¾  
- 2 ¾  
Sep 09 Wheat
542 ¼  
+ ½
Sep 09 KC Wheat
+ 4 ½ 
Sep 09 Min Wheat
- 4 ¼ 
Dec 09 Meal
- 3.2
Dec 09 Oil
+ 0.39

  • Corn good to excellent conditions remain unchanged at 71% vs. 65% yr ago
  •   Beans good to excellent conditions 1% higher at 67% vs. 61% yr ago
The grain markets closed mixed to positive in today’s session. Corn managed to close slightly higher after trading on both sides of unchanged. Fundamentals remain weak and will continue to do so unless the weather changes drastically. Cooler temperatures and rainfall projected across large portions of the Midwest are making conditions nearly ideal for corn development. Much of the corn planted on time should make it through pollination under these conditions. The later planted corn could still see hot dry conditions, but until the forecast reflects this change corn rallies look to be a function of short covering rather than bullish buying. In fact, we are now reading many estimates for record yields close to 160 bu/ac vs. the current USDA projection of 153.4 bu/ac. Regardless of the final yield, the thought is for a higher figure. Now if corn can manage to rally towards and above the $3.50 mark in December futures this appears to be an area to sell. While futures price sentiment for corn remains bearish, one positive note is that basis levels should remain firm until harvest begins, thanks to the lack of selling. Farmer selling has nearly dried up on this last price break, yet old crop corn still sitting unpriced in bins across the country will need to be moved ahead of fall harvest. Today’s bean complex market was yet again very interesting as traders resumed the bull spreads. It seems that China (or industry news) cannot make up their mind on whether they need to buy more old crop beans or sell reserves. While we cannot control or predict what China will do to affect old/new crop spreads, we are still looking for new crop sales on price rallies. The main factor behind this is number of planted acres and current yield outlooks. Meanwhile, wheat remains mixed in a two-sided trade. Today’s crop conditions report did not show any significant surprises; therefore tomorrow’s trade looks to be a follower of outside market indicators. 
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