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Corn Market Analysis  for 7/6/2010

September Corn closed down 4 1/2 at 368, 12 off the high and 1/2 up from the low. December Corn finished down 5 1/4 at 379 1/4. This was 12 1/4 off the high and 1/4 up from the low.

December corn started the day with a considerable gain, but sold off over the course of the session to finish lower. Traders said that speculative long liquidation, and some new speculative selling pushed the market lower amid an absence of fresh bullish news. A turn lower in crude oil was also said to add to the negative tone, although the dollar stayed substantially lower into early afternoon. Ideas are mixed to unchanged regarding the corn quality rating on this afternoon’s Crop Progress report from the USDA. This week’s weather outlook includes heavy rains moving from the south central Plains into Missouri and parts of Arkansas on Thursday with more moderate totals pushing on into central Illinois and parts of the mid south. An expanding dry and hot zone in the Black Sea region now stretches from Eastern Ukraine into Kazakhstan, and this is considered a growing threat to spring grain crops such as corn. This week’s export inspections for corn were 35.148 million bushels, down from 39.296 million last week. To reach the USDA’s current export forecast, inspections need to average 48.719 million.  Cumulative inspections stand at 77.9% of the USDA projection versus a 5-year average of 79.7%.

September Rice closed  up  0.06 at 9.87, 0.08 off the high and 0.07 up from the low.

 Wheat Market Analysis  Report for 7/6/2010

September Wheat finished up 4 1/2 at 507 1/2, 7 1/2 up from the low and 18 1/2 up off the high. December Wheat closed up 6 1/2 at 535 1/2. This was 9 3/4 up from the low and 17 3/4 off the high.

December wheat rallied throughout the overnight session, extended its gains in the first minutes of the day session, and then eased from that point into the close. However, wheat managed to post a moderate gain on the day when all was said and done. Wheat posted a substantial gain on corn on the day and it also managed to post modest gains on KC and Minneapolis wheat basis the December contracts. Hot and dry weather in Europe was considered the main supportive factor this morning along with a weaker dollar. Weather issues in Europe include a spreading dry region that extends from western Kazakhstan through the southern Urals and the Volga region of Russia and into eastern Ukraine. Lost acreage in Canada is also considered supportive along with the huge net short position that is held by trend-following funds in wheat. This week’s export inspections for wheat were 16.762 million bushels, down from just over 18 million last week. Inspections need to average 17.3 million each week to reach the USDA’s current export projection. Cumulative inspections stand at 7.9% of the USDA’s projection versus a 5-year average of 8.6%.

December Oats closed up 5 at 256. This was 10 1/2 up from the low and 5 off the high.

 Soybean Complex Market Analysis  for 7/6/2010

August Soybeans finished down 4 at 940 1/2, 17 1/2 off the high and 2 up from the low.  November Soybeans closed down 5 3/4 at 900. This was 3/4 up from the low and 20 off the high. 

August Soymeal finished  up 0.7 at 286.7. This was 3.9 off the high and 3.7 up from the low.

August Soybean Oil ended  down 0.17 at 35.99, 0.05 up from the low and 0.67 off the high. 

November soybeans started the day session at their highest level since June 30th today, but sold off into mid morning and then again into early afternoon. This took the November contract below Friday’s lows prior to the close with today’s settlement the lowest since June 10th. However, the old crop July contracts finished higher on the day in both soybeans and meal, posting significant gains on deferred old crop contracts. Basis levels for soybeans were firm at processors this morning. This week’s export inspections for soybeans were the lowest since September 17th, 2009 at just 2.261 million bushels. Inspections need to average 10.588 million bushels each week to reach the USDA’s current export projection for 2009/10. Cumulative inspections stand at 93.6% of the USDA’s projection versus a 5-year average of 90.8%. Forecasts call for moderate to slightly above normal temperatures in the central, western and NE soybean belt with above normal temperatures to the south and in the east. Heavy rains are expected to move into Arkansas and Missouri from the southern Plains by Thursday with this system pushing more moderate amounts into central Illinois and parts of the mid south by the end of the week. Traders expect a slight improvement in crop ratings for the weekly update this afternoon.

With today’s review mostly about weather, 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 commodity trading system.

Andy Waldock circulates this blog.  Andy Waldock is a financial advisor, asset manager, trader, analyst and brokerfor Commodity & Derivative Advisors, located in Sandusky, Ohio.  Therefore, Andy Waldock may have positions for himself, his family, or his customers 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 employ a high degree of leverage and commodity trading  may not be advisable for all investors.  There is substantial risk in investing in commodity futures.  If you are interested in reading other circulated articles, commenting  on his writings or subscribing to Andy’s blog, please visit http://blog.commodityandderivativeadv.com.

The daily commentaries provide a rundown of each commodity’s traded price activity, an analysis of the factors that influenced price activity, a summary of any reports released that day, and a look ahead at the schedule for the next day.  CME Group provides market commentaries for corn, wheat, soybeans, gold and silver.