Grains end the day mixed 7/22/09

Published on: 16:46PM Jul 22, 2009
Sep 09 Corn
- 3 ½
Dec 09 Corn
319 ¼
- 2 ¾ 
Aug 09 Beans
1018 ½  
+ 4
Nov 09 Beans
+ 3 
Sep 09 Wheat
- 12 ¾
Sep 09 KC Wheat
554 ¾ 
- 11
Sep 09 Min Wheat
- ¼ 
Dec 09 Meal
+ 0.5
Dec 09 Oil

Corn and wheat closed lower and soybean closed higher. Wheat led the way lower today on fears of Index fund liquidation and a weak corn market. Wheat demand remains very weak and U.S. prices remain well above the global prices. A sharp break in corn prices has caused wheat to become expensive relative to corn and this will need to correct. A continued good weather outlook continues to weigh on corn and soybean prices. Interior basis levels have come under pressure over the past few days and we are likely seeing some farmer selling. The farmer is still holding on to old crop supplies and this could continue to weigh on prices, especially corn, as the farmer begins to “clean out” the bins ahead of harvest. Corn has broken through most technical support areas, and the next level would be $2.90 in the nearby contract. The demand side of the equation is certainly improving for corn, but with most analysts now looking at large corn yields, it could take time before corn can find a stable bottom. Again, things can always change but for now it does not appear likely that we will see a sustained rally in our markets. There is still a “bullish” bias for the soybeans in response to the “tight” old crop stocks. This continues to draw buying interest into the new crop months and is providing ample selling opportunities. I know that there is still plenty of time to hurt the crop, but if the weather stays good, the soybean market could start to liquidate like the corn market has. Again, none of us “know” what the weather will do, but my fear is that a lot of people are waiting to see if something bad happens and prices rally. We could certainly see hot and dry weather throughout August and/or a frost or freeze hurt the crop. If we don’t, I fear a lot of farmers will be sitting with un-priced grain and sharply lower prices this fall. We are seeing this happen with corn right now.

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