June 8, 2012
Producer Marketing Manager
Outside markets are weighing on commodities this morning following yesterday’s rally. Weather is unchanged from yesterday with warm temps coming this weekend with a chance of rain on Monday for the northern plains. Items to watch for next week: Monday crop conditions and Tuesday’s USDA S/D report.
Corn – as of 7:45 Down 2
July corn futures rallied thru the $6.00 mark as the market factored in continued forecasts for warmth and dryness in most of the cornbelt. Interior corn basis continues to surge as processors and end-users are pushing to find supplies. On the export front, South Korea bought 69,000 tonnes of New Crop US corn overnight, but also made an interesting purchase of Indian corn for July shipment as well. They passed on the US July tender citing high prices and “other issues.” Funds bought 14,000 contracts yesterday pushing them to approximately 122,000 contracts long. Technical indicators are bullish with resistance on the July around $6.015 and then could run to the $6.44 area.
Soybeans – as of 7:45 Down 10
Macroeconomic forces are pressuring soybeans today. We still have the same weather concerns we had yesterday that pushed the soybean market up 42 cents. Interesting to note that funds bought only 6,000 contracts yesterday and pushed the market up 42 cents. Technically, my indicators are bullish with resistance in the old crop at that 14.25 area.
Wheat – as of 7:45 Mpls down 3, KC down 12
Harvest continues to progress thru Kansas with mixed reports on yield and quality. Export markets continue to be quiet with sales this week of 165,700 tonnes compared to a year ago of 319,000 tonnes. South Korea also passed on a tender of US wheat citing high prices.