Grains close sharply lower on good weather outlook, weak outside markets 7/06/09

Published on: 09:44AM Jul 07, 2009

July 09 Corn
342 ¾
- 3
Dec 09 Corn
344 ¾
- 12 ¾
July 09 Beans
- 45
Nov 09 Beans
- 45
July 09 Wheat
489 ¾
- 10 ½
July 09 KC Wheat
542 ¼
- 12 ½
July 09 Min Wheat
611 ½
- 6 ½
July 09 Meal
- 9.7
July 09 Oil
- 0.94

Corn, soybeans and wheat all closed sharply lower. The soybean complex led the way down today with soybeans closing 43-cents lower. Corn and wheat remained weak throughout the day as well. December corn closed 13-cents lower and at the lowest level since January 10, 2007. Good weather outlooks and weak outside markets were the main drivers today. Good rains over the weekend and a good forecast for the majority of the Midwest is driving prices lower. The global weather has also cooperated with India receiving the Monsoon rains 12 days ahead of schedule, good rains forecast for China and good rains falling in Australia. The one area of concern remains Argentina, but with so much wheat around the globe the market is not too concerned with Argentine wheat acres. Nearby corn prices remained supported today. The sharp drop in prices has helped nearby corn prices reach “value levels” for some importers. The funds have sold over 100,000 contracts of corn since June 1st, dropping the flat price by over $1/ bushel. This has drawn in some interest from the world buyer to secure some supplies. Nearby corn prices are now higher than for deferred months. This could help support prices in the short-term, but I would continue to use large rallies as selling opportunities. Although end-user buying could help support prices, a bearish weather outlook will likely dictate prices for now. The funds are now shorts in the corn, soybean oil and wheat and large longs in the soybeans and soybean meal. If the weather outlook remains good, we should continue to see the funds liquidate their soybean longs as well. As with corn, I would continue to use large rallies in soybeans as selling opportunities. Our markets had a very large sell-off today. With crop conditions coming in slightly lower on the week (listed below), we could see some kind of a recovery overnight/ tomorrow morning. The Commitment of Traders report showed the traditional funds had the following positions as of June 30th:
Long 74,000 contracts of soybeans; long 36,000 contracts of corn; and short 35,000 contracts of wheat.


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