Allendale Wrap-Up DATE \@ "M/d/yyyy" 7/13/2009
Corn: It’s almost nice to see corn have a milder 10¢ trading range after so much excitement last week. We had a relatively benign export inspection report and pretty modest moves in crude to work with today. Instead traders are starting to talk of longer term issues such as guessing nationwide yields.
Soybeans: While traders are feeling pretty confident there will be an increase in corn yield they are not ready to make that concession for soybeans yet. For now we are still using USDA’s 42.6 bushel per acre mark. That fits within the 39.6 to 43.1 final yield numbers posted in the past five years.
Wheat: Futures spent the day beating away the bearish corn and soybean tide and posted the biggest single one-day gain since June 1. For reasoning you’re not going to find one nice bullish story for wheat. Instead it appears traders were taking a little profit they made from the short side. Additionally you have some on the floor noting a well-known seasonal trading research group recommending to buy September wheat and sell either September corn or beans. Long term fundamentals are still pointing towards ample supplies here. Even if a post-U.S. harvest rally can be seen, how far can it realistically get? This morning we covered the India wheat problem. Too much wheat around and prices are too low for them to sell it. Until people like that finally admit defeat, we cannot say a bottom is near.
Rich Nelson is the Director of Research at Allendale, Inc. in McHenry, IL. Allendale is registered with the CFTC and NFA and is a member of the NIBA. www.allendale-inc.com
