Soybean Complex Market Recap for 6/22/2010
July Soybeans ended up 2 1/4 at 965 1/2, 4 1/2 off the high and 3 3/4 up from the low. November Soybeans closed down 3 at 936. This was 5 3/4 off the high and 1 3/4 up from the low.
November soybeans traded mostly lower overnight before trading in a slightly expanded range throughout the day session. Traders said that outside influences were mixed to negative today, and this may have contributed to late selling that took the November contract below the earlier lows just prior to the close. The July soybean and meal contracts gained on deferred new crop contracts today with soy oil finishing marginally lower. Traders said that buyers were reluctant to step into the market today after a rally of nearly 60 cents in the November contract over the past two weeks. Mid range forecasts still call for a surge of above normal temperatures across most of the central, eastern and southern Midwest into tomorrow with even warmer weather this weekend. Some longer term forecast are calling for a return to near normal temperatures starting during the first week of July.
Since some traders think buyers were reluctant to step into the market after a rally of nearly 60 cents, we would look at the commercial traders. 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, if Commercial traders are buying beans, we should be able to incorporate this into our commodity trading system.
July Soymeal closed up 1.8 at 290.7. This was 3.0 up from the low and 2.1 off the high.
July Soybean Oil finished down 0.12 at 37.93, 0.22 off the high and 0.1 up from the low.
July Rice finished up 0.165 at 10.845, equal to the high and 0.145 up from the low.
July Oats closed up 13 1/2 at 278. This was equal to the high and 17 up from the low.
Corn Market Analysis for 6/22/2010
July Corn ended down 3 1/2 at 351 1/2, 4 3/4 off the high and 3 1/4 up from the low. December Corn closed down 2 3/4 at 372. This was 4 up from the low and 4 off the high.
To start the overnight session December corn traded sideways and then sold off to below yesterday lows late in the overnight session with another new low for the day coming after the start of the day session. Traders said that profit taking led to selling on technical signals today with the warm and gradually drying forecast considered to be mostly favorable into the end of the week. Yesterday afternoon the USDA decreased its good-to-excellent quality rating for the US corn crop on its latest weekly Crop Progress report, but traders said that this was expected and it failed to provide support on a quiet trading day. Weather is the trade focus and this is likely to be the case for the next three weeks as the crop approaches pollination.
Wheat Market Commentary for 6/22/2010
July Wheat finished down 1 1/4 at 460 3/4, 3 off the high and 5 up from the low. December Wheat closed down 3 at 504 1/4. This was 3 3/4 up from the low and 3 1/2 off the high.
December wheat traded in a narrow range at mostly lower levels today. However, it remained above yesterday’s lows in generally featureless trade. Warm and drier weather is forecast into the end of this week, and that is expected to boost harvest progress for both hard and soft red winter wheat. The forecast for the Midwest calls for above normal temperatures with scattered showers and thunderstorms through tomorrow followed by welcome dry weather in most growing areas on Thursday and Friday. Even hotter weather is then forecast into the weekend. Traders in Europe report that Algeria is tendering for 50,000 tonnes of wheat for August shipment. Traders in Europe report that yesterday’s big wheat sale to Saudi Arabia consisted of 880,000 tonnes from Germany and 110,000 from Canada. In addition, the Egypt sale this week did not include US wheat.
Andy Waldock publishes this blog. Andy Waldock is a broker, asset manager, trader, and analyst. For that reason, Andy Waldock may have positions for himself, his family, or his clients in any market reviewed. The blog is meant for educational purposes and to develop a discussion among those with an interest in the commodity markets. The commodity markets employ a high degree of leverage and may not be suitable for all investors. Investing in the futures could result in substantial risk.
The daily commentaries provide a rundown of each commodity’s traded price activity, an analysis of the factors that influenced price activity, a review of any reports released that day, and a look ahead at the next day’s schedule. Market commentaries for corn, wheat, soybeans, gold and silver are provided by CME Group.
