Grain Market Commentary for 08-06-10
Wheat Market Recap Report for 08-06-10
September Wheat ended down 60 at 725 3/4, 115 1/4 off the high and equal to the low. December Wheat settled down 60 at 755 1/4. This was equal to the low and 112 3/4 off the high.
December wheat traded at near limit up in the overnight session before falling to a limit down close in the day session. This was far and away the largest range seen in the December contract during the July-August rally. This came on a day when some of the panic that had gripped the wheat market yesterday subsided. That panic came as importers launched tenders and attempted to switch origins from Russia and Ukraine following Russia's announcement that it was banning grain export for the period from August 15th through December 31st. Egypt may have helped to calm the markets by stating yesterday that its needs were covered for the next six months. Brazil and Argentina also weighed in with comments that pointed to an improved supply situation in that region into 2010/11. The status of existing Russian contracts remains unsettled with Russian officials stating yesterday that existing contracts would be affected by the ban. A senior official said today that exiting contracts would in fact be honored, but further reports from traders in Europe today indicate that some Russian grain export contracts have already been cancelled or switched. The US is expected to be the main beneficiary of the shift in demand away from the Black Sea. Soft red wheat basis levels were up sharply at the Gulf today.
December Oats ended down 2 1/2 at 292. This was 10 1/4 up from the low and 7 off the high.
Soybean Complex Market Review for 08-6-10
September Soybeans finished up 4 1/4 at 1039, 2 1/4 off the high and 13 3/4 up from the low. November Soybeans closed up 4 1/2 at 1033 1/2. This was 14 up from the low and 1 3/4 off the high.
August Soymeal finished unchanged at 313.6. This was 3.1 up from the low and 1.4 off the high.
August Soybean Oil settled up 0.13 at 41.39, 0.23 off the high and 0.24 up from the low.
Soybeans, oil and meal all finished with modest gains despite a limit down close in December wheat and weakness in equities and crude oil. Traders said that support came from a lower dollar as that market pushed below a key low from April and from a USDA announcement of a sale of 326,000 tonnes of soybeans to China for the 2010/11 crop marketing year. Traders also said that a somewhat improved weather outlook in the US has dampened bullish enthusiasm. drier and cooler weather is dominating the Midwest today, as the 90-degree line is being pushed to well south of the Ohio Valley. In addition, next week's projected highs in the northern Midwest have been trimmed to the low 90s with the duration of the predicted heat wave just 3-4 days. Some traders indicate that this is not a scenario that would normally cause damage to the developing soybean crop.
Corn Market Review for 08-06-10
September Corn finished up 1 1/2 at 405, 3 1/4 off the high and 13 up from the low. December Corn settled up 2 at 420. This was 13 up from the low and 3 off the high.
December corn saw 2-sided, mostly lower action today with the highs coming during the overnight session and the lows coming early in the day session. Nevertheless, the December contract did manage to post a higher close when all was said and done. Traders said that corn was boosted by active trade in the wheat-corn spread that featured profit taking by longs on the wheat side. They noted that added support came from a lower dollar while pressure came from lower equities and crude oil. The weather outlook improved slightly in the Midwest into the end of the week with next week's highs in the upper Midwest also a bit lower than some previous expectations. Cooler and drier conditions today across most of the Midwest were also considered beneficial. The USDA announced a sale of 157,581 tonnes of corn to Japan this morning for delivery during 2010/11. Basis levels were steady for corn at the Gulf this morning versus significant gains in the soft red wheat basis at the Gulf.
September Ricesettled down 0.32 at 10.61, 0.31 off the high and equal to the low.
After reading today's commentary,traders might want to take a peek at the commercial traders momentum. The Commercial Trader momentum can be tracked by using the Commodity Futures Trading Commission Commitment of Traders reports. Our idea is that, in a value driven commodity futures market no one knows fair value like the people who produce it or, have to use it. In fact, it is precisely their sense of value that provides the commodity market's rhythmic meanderings that swing traders love so much. Let's face it, producers know when their product is overvalue and it should be sold just as well as end line users know when they should be stocking up at low prices. Therefore, trader should be able to incorporate this valuable information into their future market education.
Andy Waldock circulates this blog. Andy Waldock is a financial advisor, broker, asset manager, trader, and analystfor Commodity & Derivative Advisors, located in Sandusky, Ohio. Therefore, Andy Waldock may have positions for himself, his clients, or his family in any commodity future market discussed. The blog is meant for educational purposes and to develop a discussion among those with an interest in the commodity future markets. The commodity markets may not be advisable for all investors due to the high degree of leverage. There is considerable risk in investing in commodity futures. If you are interested in reading other published articles, commenting on his publications or subscribing to Andy's blog, please visit http://blog.commodityandderivativeadv.com, or if you have any questions, please call 1-866-990-0777.
The daily commentaries provide a review of any reports released that day, a recap of each commodity's traded price activity, an analysis of the factors that influenced price activity, and a look ahead at the schedule for the next day. CME Group provides market commentaries for corn, wheat, soybeans, silver and gold. The information in the Market Commentaries was obtained from sources believed to be reliable, but we do not guarantee its accuracy. Neither the information nor any opinion expressed therein constitutes a solicitation of the purchase or sale of any futures or options contracts.