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Corn Market Commentary for 7/7/2010

September Corn closed up 10 1/4 at 378 1/4, 3/4 off the high and 10 3/4 up from the low. December Corn finished up 10 at 389 1/4. This was 10 3/4 up from the low and 3/4 off the high.

Overnight December corn posted modest gains and then surged higher to start the day session. The market made modest new highs for the day in late morning and then again just prior to the close, although the rally fell short of yesterday’s highs. Traders said that crop concerns in the US were a major issue along with a setback in the dollar over the course of the day as well as sharp rallies in crude oil and equities. Crop concerns were heightened by a 2% drop in the good-to-excellent rating for the overall corn crop on yesterday’s Crop Progress report from the USDA. Traders had expected a slight improvement. Conditions have fallen from 75% good-to-excellent two weeks ago to 73% last week and to 71% this week. Iowa corn ratings fell to just 65% good to excellent from 72% last week and as high as 78% in early June. Hot and dry conditions in Europe and Western Europe also helped to provide support and traders are nervous with high temperatures and uncertain crop conditions in parts of China. Gulf basis were said to be steady to firm this morning with talk that higher quality export corn is still in relatively tight supply.

September Rice ended up 0.265 at 10.135, 0.015 off the high and equal to the low.

Wheat Market Commentary Report for 7/7/2010

September Wheat finished up 23 at 530 1/2, 1 3/4 off the high and 25 3/4 up from the low. December Wheat closed up 23 3/4 at 559 1/4. This was 26 1/2 up from the low and 1 3/4 off the high.

December wheat chopped in a narrow range on both sides of yesterday’s close overnight and then surged to near yesterday’s high to start the day session. The market pushed through yesterday’s high to a new high for the day in late morning before extending the day’s gains again prior to the close. This took the December contract to its highest level since March 4th. Traders said that crop concerns in Europe and in the former Soviet Union were the main factors behind the rally with buying by funds a noted feature in today’s trade. More talk of the potential for a smaller crop in Canada and the outlook for a bullish tilt to the world supply/demand outlook for the USDA reports on Friday added to the positive tone. However, traders are looking for the USDA to raise its all-wheat production estimate by nearly 100 million bushels from 2.067 billion in June. Soft red winter (Chicago) wheat production is expected to show a small decline.

December Oats ended up 6 3/4 at 262 3/4. This was 3/4 off the high and 7 1/4 up from the low.

Soybean Complex Market Review for 7/7/2010

August Soybeans finished up 27 1/4 at 967 3/4, 27 1/4 up from the low and 4 1/4 off the high. November Soybeans closed up 32 1/2 at 932 1/2. This was 3 1/4 off the high and 31 3/4 up from the low.

August Soymeal ended up 7 at 293.7. This was 0.5 off the high and 7.9 up from the low.

August Soybean Oil ended up 0.97 at 36.96, 0.88 up from the low and 0.13 off the high.

November soybeans posted modest gains overnight and surged above yesterday’s highs early in the day session. This was followed by a series of gains into early afternoon and a final surge to a major new high for the day prior to the close. This took the November contract to its highest level since June 23rd. Oil and meal were also sharply higher with new crop contracts posting minor gains on old crop in meal and soybeans on the day. Traders said that support came from deterioration in the US soybean crop on the USDA’s latest Crop Progress report yesterday afternoon. Added support came from a reversal to lower on the day in the dollar along with a sharp rally in equities and crude oil. Weather concerns are also causing some traders to look for more of a weather premium in the soybean market. The hottest temperatures are now called for in the 11-15 day timeframe, but some traders are more concerned about excessive rains in recent weeks, which got some soybean and corn fields off to an uneven start. South Korea bought 25,000 tonnes of soybeans.

With today’s recap talking about crop concerns, sharp rallies in the crude oil and equities markets , ratings for the overall crop progress  and  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 publishes this blog.  Andy Waldock is a financial advisor, broker, asset manager, trader, and analystfor 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 to develop a discussion and educate those with an interest in the commodity future markets. The commodity markets may not be appropriate for all investors due to the high degree of leverage.  Investing in the commodity futures could result in considerable 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.

The daily commentaries provide a recap 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 schedule for the next day.  Market commentaries for corn, wheat, soybeans, silver and gold are provided by CME Group.