Wheat, Corn and Soybean Complex Market Commentary Report for 9-1-10
9-1-10 - Wheat Market Recap Report
December wheat rallied sharply today, wiping out yesterday's big loss in the process and settling at the highest level since August 23rd. Traders said that strong export demand and outside markets were behind today's gains. The dollar was sharply lower and this improves the competitive position of US wheat on world markets. Egypt bought 225,000 tonnes of US wheat on its latest tender with delivery scheduled for mid October. This followed news earlier this morning that a German milling company had bought 20,000 tonnes of US hard red spring wheat, the first such purchase from Germany in three years. Germany is suffering from a late, wet harvest that is expected to sharply reduce the quality of this year's wheat crop, and bring further imports of higher quality milling wheat from France and the US during the remainder of the 2010/11 crop marketing year. Tunisia is also tendering for 50,000 tonnes of soft wheat along with 50,000 tonnes of durum for delivery in October and November. The Rosario Grains Exchange in Argentina forecast this year's wheat crop at between 9.0 and 10.5 million tonnes today. Last year's drought-stressed crop was estimated at about 7.5 million tonnes. Planting has just been completed for wheat in Argentina. Iraq also announced this morning that it intended to start issuing tenders for wheat and rice in October.
September Wheat ended 23 higher at 675 1/2, 2 3/4 off the high and 22 1/2 up from the low. December Wheat closed up 23 at 708 3/4. This was 23 up from the low and 3 1/4 off the high.
December Oats closed up 3 at 279 3/4. This was 1 1/2 up from the low and 3 3/4 off the high.
Soybean Complex Market Commentary for 9-1-10
November soybeans settled lower on the day along with December meal on a day that saw sharp gains in wheat, equities and crude oilalong with a sharply lower dollar. Traders said that concern over bigger than expected South American supplies of soybeans along with selling by spreaders versus corn and wheat helped to pressure the soybean market today. Weather in the US is expected to remain mostly favorable for the remainder of the week despite some continued dryness in the eastern Midwest. Soy oil gained on meal on the day, but a late retreat in soy oil narrowed those earlier gains on the spread. Brazil's Trade Ministry said today that Brazil's soybean exports in August were 2.966 million tonnes, down from 3.999 million in July. Argentina's agriculture minister said today that next year's production may be down slightly this year at 52 million tonnes from the USDA's estimate for last year of 54.5 million tonnes. However, this total is still 2 million tonnes above the USDA's current forecast of 50 million tonnes for Argentina for 2010/11. Planting in Brazil starts in early September and extends through mid December. Planting in Argentina starts mainly in November.
November Soybeans closed 4 1/2 lower at 1005 1/2, 1 1/2 up from the low and 12 off the high.
December Soybean Oil finished 0.07 higher at 40.12, 0.14 up from the low and 0.51 off the high.
December Soymeal closed down 1.6 at 293.6. This was 3.6 off the high and 0.3 up from the low..
Corn Market Commentary for 9-1-10
December corn posted a substantial gain today with a strong finish that marked the highest close in the December contract since January 11th. Traders credited the rally to a sharp drop in the dollar and a sharp rally in crude oil and equities. Those markets gained on better than expected manufacturing numbers in China and the US. Some traders indicate that a stronger economic outlook in the US could help to reinforce the big domestic feed and ethanol usage numbers that are currently forecast by the USDA for the 2010/11 crop marketing year. Dryness in the eastern Midwest and some areas of the south and SE is still causing minor yield concerns, with rains and cooler weather expected in the western, NW and north central Corn Belt today and tomorrow. The cooler weather is expected to last into the weekend amid drier conditions. The Energy Information Administration (EIA) released its weekly ethanol production data today. Ethanol production for the week ending August 27 averaged 856,000 barrels per day. This is up 21,000 barrels per day (2.51%) versus last week and up 129,000 barrels per day (17.74%) from last year. Total Ethanol production for the week was 5.992 million barrels, up 147,000 barrels from last week and up 903,000 from last year. Corn used in last week's production is estimated near 89.88 million bushels. This crop year's cumulative corn used for ethanol production for this crop year estimated near 4.43 billion bushels. The current USDA estimate for corn usage for the year with a few days left is 4.5 billion bushels. South Korea's largest feed maker bought up to 55,000 tonnes of optional origin corn today on a tender for up to 165,000 tonnes.
September Corn ended up 7 3/4 at 432 1/4, 3/4 off the high and 9 up from the low. December Corn closed up 7 1/2 at 446 3/4. This was 1/2 off the high and 9 up from the low.
November Rice settled 0.005 down at 11.335, 0.015 up from the low and 0.135 off the high.
After reading today's review,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 family, or his clients in any commodity future market reviewed. The blog is meant to develop a discussion and educate 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. Investing in the commodity futures could result in substantial risk. If you are interested in reading other published articles, commenting on his writings 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 an analysis of the factors that influenced price activity, a recap of any reports released that day, a summary of each commodity's traded price activity, and a look ahead at the schedule for the next day. CME Group provides market commentaries for soybeans, corn, wheat, 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.