Grains: Now through harvest

Market Pulse: July 11, 2011

Fundamentals

Corn fundamental outlook — Medium-term bearish — Corn prices plunged after the USDA raised its U.S. corn acreage estimates and June 1 stocks. Corn prices should receive some underlying support, however, from the late planting season, strong corn demand and the tight supply situation. The corn 2011-12 stocks/use ratios are extremely tight with the United States at 5.2% and the world at 12.8%.

Soybean fundamental outlookBull market correction — Soybean prices are in a consolidation mode, but the longer-term trend remains bullish with the USDA on June 30 cutting its acreage estimates, with Chinese demand strong, and with the U.S. 2011-12 stocks/use ratio tight at 5.8%. However, global soybean supplies are adequate with the 2011-12 world stocks/use ratio near average at 23.4%.

Wheat fundamental outlookNear-term bearish — Wheat prices have fallen sharply on the prospects for increased global output this year. A resumption of Russian wheat exports in July is near-term bearish, but adverse weather in Europe and Canada may limit global wheat output this year. The wheat 2011-12 supply situation is near average with the U.S. stocks-to-use ratio at 30.0% and the global stocks-to-use ratio at 27.6%.

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Have a prosperous trading week.

To see my market views daily you can follow me on Twitter at http://twitter.com/TrendsinFutures.

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