Wheat Market Analysis  Report for 7/21/2010

September Wheat finished up 11 1/4 at 588 1/4, 14 1/4 up from the low and 5 3/4 off the high. December Wheat closed up 11 3/4 at 618 3/4. This was 14 3/4 up from the low and 5 1/2 off the high.

December wheat opened lower overnight, but it began to rally during the second half of the session before accelerating to sharply higher levels during the day session. This was capped with new highs for the day prior to the close, but the market fell back to near the midpoint of the day’s trading range into the final minutes of the day session. Algeria became the latest country to lower its grain production estimate today, although exact figures for wheat were not available. Their agriculture minister pegged overall cereal production at 4.5 million tonnes, down sharply from 6.1 million last year and down from recent projections. He added that durum wheat would be up, but that barley and soft wheat would be down this year. Traders expressed renewed concern over reduced production in Europe this morning. Sources in France indicate that yields there are mixed with yields still thought to be deteriorating in the Black Sea region, principally in Russia. France was a seller of 300,000 tonnes of wheat to Algeria this week, and traders said that this helped to boost prices in Europe this morning.

December Oats finished up 2  at 265 1/2. This was 2 1/4 off the high and 3 3/4 up from the low.

Soybean Complex Market Analysis for 7/21/2010

August Soybeans finished 3 1/2 higher at 1015 1/4, 4 3/4 off the high and 7 3/4 up from the low. November Soybeans closed 5 1/2 higher at 978 1/2. This was 4 1/2 off the high and 9 1/2 up from the low.

August Soybean Oil closed down 0.14 at 38.26, 0.31 off the high and 0.06 up from the low.

August Soymeal closed 1.8 higher at 303.3. This was 2.3 up from the low and 2.0 off the high.

November soybeans trended higher from late in the overnight session through early afternoon. This came against a backdrop of steady gains in the dollar today and eroding equities markets. The market trimmed its gains into the close, but soybeans closed higher on the day while soybean oil finished lower. Gains in soybeans were considered weather related this morning with the market also reacting to yield concerns for wheat in Europe and fund buying in corn on concerns over forecasts of temperatures in the mid 90s and low 100s across southern portions of the Midwest by Friday. However, rain is also expected across much of the northern soybean belt through the end of the week and cooler weather is in the forecast for the weekend.

Corn Market Review  for 7/21/2010

September Corn finished up 5 3/4 at 379 3/4, 1 3/4 off the high and 6 1/2 up from the low. December Corn closed 6 higher  at 393 1/2. This was 7 up from the low and 1 1/2 off the high.

December corn trended higher through most of the overnight session and then added to its gains to start the day session. The market then traded near the early highs into early afternoon before easing somewhat into the close. Forecasts in the US are mostly unchanged this morning with moderate to heavy rains expected across the western Corn Belt and into the northern tier of the central and eastern Corn Belt by the end of the week. Forecasts also call for a surge of very hot air extending into virtually all major growing areas by Friday. The Energy Information Administration (EIA) released its weekly Petroleum Status Report this morning and it showed a modest increase in ethanol production to 836,000 barrels per day for the week ending July 16th from 821,000 the previous week. Ethanol stocks also rose to 19.877 million barrels from 19.674 million the previous week.

September Rice closed  up 0.1  at 9.98, 0.02 up from the low and 0.02 off the high.

With today’s commentary talking mostly about hot and dry weather concerns, traders might want to take a peek at the commercial traders momentum.  The Commercial Trader momentum can be tracked by using the Commodity Futures Trading Commission Commitment of Traders reports.  Our idea is that, in a value driven commodity futures market no one knows fair value like the people who produce it or, have to use it.  In fact, it is precisely their sense of value that provides the commodity market’s rhythmic meanderings that swing traders love so much.  Let’s face it, producers know when their product is overvalue and it should be sold just as well as end line users know when they should be stocking up at low prices.  Therefore, trader should be able to incorporate this valuable information into their future market education.

The daily commentaries provide a rundown of each commodity’s traded price activity, an analysis of the factors that influenced price activity, a summary of any reports released that day, and a look ahead at the schedule for the next day.  CME Group provides market commentaries for corn, wheat, soybeans, gold and silver.   The information in the Market Commentaries was obtained from sources believed to be reliable, but we do not guarantee its accuracy. Neither the information nor any opinion expressed therein constitutes a solicitation of the purchase or sale of any futures or options contracts.

Andy Waldock publishes this blog.  Andy Waldock is a financial advisor, asset manager, trader, analyst and brokerfor Commodity & Derivative Advisors, located in Sandusky, Ohio.  For that reason, Andy Waldock may have positions for himself, his clients, or his family in any commodity future market discussed. The blog is meant for educational purposes and to develop a discussion among those with an interest in the commodity future markets. The commodity markets employ a high degree of leverage and commodity trading  may not be advisable for all investors.  Investing in the commodity futures could result in substantial risk.  If you are interested in reading other published articles, commenting  on his publications or subscribing to Andy’s blog, please visit http://blog.commodityandderivativeadv.com, or if you have any questions, please call 1-866-990-0777.