Corn Market Recap for 9-27-10
December corn made a new 2-year high overnight and then posted a substantial loss during the day session, finishing near the low for the day. Overnight volume was heavy and into the day session with overnight volume said to be at its highest level since August 5th. Traders said that fund selling and somewhat increased selling by farmers were features in the cash and futures markets respectively today. They also noted that the slower pace of export sales and shipments in recent weeks suggests that higher prices are starting have a dampening effect on usage. This week’s export inspections for corn were 34.0 million bushels, down slightly from 35.4 million last week. Inspections need to average 40.2 million bushels each week to reach the USDA’s current export projection. This is the second week in a row that inspections have fallen short of the average needed. Export sales have fallen short of the average needed for the past three weeks in a row. The USDA will release its next Export Sales report on Thursday with quarterly grain stocks also due out on Thursday.
December Corn ended down 9 at 512 3/4, 1 3/4 up from the low and 16 off the high. March Corn closed down 9 at 525 1/4. This was 15 3/4 off the high and 2 up from the low.
November Rice closed 0.205 higher at 12.565, 0.005 off the high and 0.205 up from the low.
Wheat Market Commentary Report for 9-27-10
December Wheat finished 13 1/2 lower at 706 1/2, 4 1/2 up from the low and 24 1/2 off the high. March Wheat settled down 13 1/2 at 736. This was 24 3/4 off the high and 4 up from the low.
December wheat traded higher overnight, but sold off to substantially lower levels into the day session. European wheat also turned lower in afternoon trade, and this follows a sharp pullback last week. Spreaders versus corn were active on the day and traders indicated that pressure in wheat came mainly from a favorable outlook for winter wheat planting in the US and from favorable crop prospects in the Southern Hemisphere where wheat has already been planted. This week’s US export inspections for wheat were 24.3 million bushels, down from 33.1 million last week. Each week to meet the USDA’s current export projection inspections need to average 24.9 million. One analyst noted that wheat traders may have been disappointed that the cumulative inspections total continues to run short of the average pace at this time of year. He added that exports could pick up after the end of the year if the EU (France) runs out of exportable supplies at that time as some analysts are currently projecting. Egypt tendered for 55,000-60,000 tonnes of soft or milling wheat.
December Oats ended down 4 at 348. This was 3 1/2 up from the low and 7 off the high.
-27-10 – Soybean Complex Market Recap Report
November Soybeans ended 2 1/2 higher at 1128 1/2, 6 1/2 up from the low and 15 1/2 off the high. January Soybeans settled up 2 3/4 at 1138 1/4. This was 15 off off the high and 6 1/2 up from the low. December Soymeal closed 1.3 lower at 315.7. This was 1.5 up from the low and 6.1 off the high. December Soybean Oil finished up 0.08 at 44.97, 0.48 off the high and 0.28 up from the low.
November soybeans made a new 2-year high overnight along with December corn. However, while corn turned substantially lower into the day session, soybeans managed to eke out a small gain as of the close. Meal posted a small loss on the day in the December contract while soy oil posted a marginal gain. Traders said that soybeans benefited from buying by spreaders who were sellers in corn today on ideas that soybeans may need to maintain recent gains in order to maintain planted acreage in the US next spring. Improving harvest weather is expected in the US into mid week or longer, bringing dry conditions west of Ohio today and tomorrow with drier weather moving into Ohio as well by mid week. This week’s export inspections improved over last week, but the total was still well below the average shipments needed each week to reach the USDA’s projection for the 2010/11 crop marketing year. Inspections came in at 18.6 million bushels, up from 12.8 million last week. They need to average 29.4 million bushels each week to reach the USDA’s current export projection. Rains have pushed into 3 of Brazil’s top 5 soybean producing states in recent days with the heavy totals and the longest duration of rains coming in Rio Grande do Sul. This was viewed as negative by some traders. Farther north, Brazil’s #1 soybean producing state, Mato Grosso remains dry, but rain is expected there by early October.
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.
This blog is publicized by Andy Waldock. Andy Waldock is a financial advisor, analyst, broker, asset manager and traderfor Commodity & Derivative Advisors, located in Sandusky, Ohio. As a result, Andy Waldock may have positions for himself, his clients, or his relatives in any commodity future market discussed. The blog is meant for educational purposes and to develop a dialogue among those with an interest in the commodity future markets. The commodity markets employ a high degree of leverage and commodity trading may not be suitable for all investors. There is considerable 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, 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 review 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.
