[Farmmarketnews] Todd Austin Grain Commentary for July 6, 2011

Thu Jul 7 08:58:40 EDT 2011

Wednesday July 6, 2011

Commodity
Period
Price  
Weekly Movement

Corn CBOT
Sept
6.18 ¾     
futures

Soybeans CBOT
Aug.
13.22 ¼     
rolled

Wheat CBOT
Sept.
6.27   
To

Wheat Minn.
Sept.
8.27 ½   
Next 

Wheat Kansas
Sept.
7.36 
futures

month

Canadian $
Sept. 
 1.0284
↑
51 
points

CORN
The USDA said exporters conducted deals to sell 120,000 metric tons of last
year's corn crop to Egypt and 225,000 metric tons of the upcoming crop to South
Korea. However, grain traders were still waiting for confirmation of sales to
China, upon speculation that the country recently bought 500,000 metric tons.
The USDA's weekly crop progress report, issued after the markets closed
Tuesday, indicated 69% of the corn crop was in good-to-excellent condition, up
one percentage point from a week ago. The report was in line with the
expectation of analysts, yet improvements in the excellent category surprised
some traders. The large acreage reported at the end of June shocked the corn
market. Good yields are vital in terms of producing a large crop.
Corn output in Brazil was cut by approximately 3.7 percent, after a frost
damaged crops in Parana state. Parana, the biggest corn grower in Brazil, will
produce 11.2 million metric tons this year, down from a June 20th estimate of
13.4 million tons, according to the state’s agriculture secretariat. Brazil is
expected to reap a total 57.1 million tons this year, the nation’s Agriculture
Ministry recently reported.  
SOYBEANS
Palm oil slumped to the lowest level in more than eight months after a U.S.
report showed larger- than-expected soybean inventories, and as a decline in
crude oil prices cut the appeal of vegetable oils as biofuels. Soybean
stockpiles as of June 1 were 619 million bushels, 4.6 percent more than forecast
and above year-earlier supplies according to the USDA.
Soybean prices are seen as following the grains lower as a result of higher
than expected stocks and spill-over bearish sentiment. The recent stocks report
implied soybean demand during the third quarter fell to the lowest level since
2003-04 and will result in a bearish response to soybean prices. It is also
likely to cause the USDA to revise ending stocks for the full 2010/11 marketing
year.
With the lower than expected planted acreage report last week, the soybean
market may be sensitive to crop conditions this year as the market will need to
see high yields in order to avoid tightness next year. Strength in the wheat and
corn markets helped support, but weakness in meal helped pressure. Weekly export
inspections, released during the session yesterday, came in at just 4.51 million
bushels, which was well below trade expectations. Shipments need to average
12.96 million bushels each week to reach the USDA projection for the year.
WHEAT
Traders are keeping a close eye on demand for U.S. wheat as countries in the
Black Sea region are poised to increase exports after limiting grain sales
during the past year, following a devastating drought. Increased competition for
export business from Russia and Ukraine, along with a strengthening U.S. dollar,
could reduce demand for U.S. wheat.
These concerns about demand are rising as harvest is progressing across the
Northern Hemisphere, bringing in fresh supplies to the marketplace. In the U.S.,
the winter wheat harvest was 56 percent complete, above the five-year average of
52% according to federal data.
The U.S. Department of Agriculture rated 70% of the crop as good to excellent,
up one percentage point from a week earlier. Development remains slow due to
late planting and wet conditions. The USDA said 13% of the spring wheat crop was
in the headed stage of development, well below the five-year average of 52%.
Harvest contract prices for July 6, 2011 at the close of markets are as
follows:
SWW at $226.36 per tonne ($6.16/bu.), SRW at $206.82 per tonne ($5.63/bu.), HRW
at $245.91 per tonne ($6.69/bu.), and HRS at $292.28 per tonne ($7.95 /bu.).

John Jordan
Editor, AgriLink and Farm Market News
University of Guelph, Ridgetown Campus
Tel. 519-674-1500 x 63577
Fax. 519-674-1530
E-mail: jjordan at ridgetownc.uoguelph.ca 
AgriLink website : www.ridgetownc.com/agrilink 
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