Corn: Corn started off this week similar to where it left off last week. Friday’s disappointment was the lack of the ability for this market to find a profit-taking bounce. This may have carried over to Monday as well. Last week, most traders would have seen a morning bounce as good potential for a turn back higher, and on Monday it was sold. That is a drastic change from just a week ago. June is still end of quarter, and if funds want to make their second-quarter numbers look good, they must first exit positions even if they intend to buy again to start July…Ryan Ettner
Soybeans: Beans closed near the upper end of the range as traders covered short positions near mid-day on Monday. Funds bought 3,000 contracts of beans after a solid week of selling. Beans had support Monday from a Chinese purchase. China bought 132,000 tonnes of beans and gave traders confidence that demand might be picking up.
Crop conditions came out, as well, and could be looked at as friendly overnight with a 2% decline in good-to-excellent ratings. The dollar fell apart and was one more reason to support commodities. That could still be a good indicator over the next few sessions as we get closer to the USDA report on Thursday. The trade is looking for only a small change in acres, which may not be a market mover. Other fundamental news has been quiet, but it is the end of the month and end of a quarter. Volatility should remain high with light volume…Steve Georgy
Wheat: Continued fund liquidation pressured the wheat pit again. Managed money continues to liquidate all commodities as traders continue to have a risk-off mentality due to economic concerns around the world. There is concern that the Greek bailout measure could fall through. There is also a concern that the U.S. Congress will not get the U.S. debt ceiling raised before the country starts to default on our loans. A potential default could have very negative consequences on the world economic recovery.
The next big report we’ll be trading will be Thursday’s quarterly grain stocks report and planted acreage report. The trade is looking for all wheat acres to come in at 56.671 million acres. The spring wheat acres are projected at 13.349. While the durum wheat acreage is 2.034 million. For the quarterly stocks report, the trade is looking for wheat stocks to come in at 825 million bushels. Allendale is forecasting stocks to come in at 826 million bushels. This is down from last years 973 million bushels in stock at this time last year. It is higher than the June supply/demand report estimate of 809 million bushels. Thursday’s number represents the end of the old crop marketing year for wheat…Jim McCormick
Ryan Ettner is a registered commodities broker and grains analyst at Allendale, Inc. Steve Georgy is a Sr. Broker/Manager at Allendale, Inc. Rich Nelson is Director of Research at Allendale, Inc. Allendale is registered with the CFTC and NFA and is a member of the NIBA. www.allendale-inc.com.