10-28-10 – Wheat Market Recap Report

December wheat moved higher for the 5th day in a row today, again outpacing corn and soybeans to the upside in the process. A sharp drop in the dollar was credited with setting a positive tone overnight and into the start of the day session with buying by funds also a factor. The International Grains Council left its world production forecast unchanged this month at 644 million tonnes. Export sales were solid today, up from last week and coming in at the highest level in 4 weeks. This week’s net sales for all-wheat were 604,400 tonnes. Soft red winter wheat sales were stronger at 131,600 tonnes with Egypt the biggest buyer by far. As of October 21, cumulative all-wheat sales stand at 57.2% of the USDA forecast for 2010/2011 versus a 5 year average of 61.7%. Sales need to average 457,000 tonnes each week to reach the USDA forecast. The European Union cleared 389,000 tonnes of soft wheat for export this week. This brings the total for the marketing year to 8.1 million tonnes.

December Wheat finished up 15 1/2 at 718 1/4, 17 3/4 up from the low and 3 1/2 off the high.

March Wheat closed 16 1/2 higher at 758. This was 18 1/2 up from the low and 2 off the high.

December Oats settled 4 lower at 366. This was equal to the low and 9 1/4 off the high.

Soybean Complex Market Analysis  for 10-28-10

November Soybeans finished 1 1/4 higher at 1225, 7 up from the low and 11 3/4 off the high.

January Soybeans ended unchanged at 1236. This was 12 3/4 off the high and 6 1/4 up from the low.

December Soybean Oil finished 0.1 higher at 49.7, 0.45 off the high and 0.34 up from the low.

December Soymeal settled 0.4 higher at 336.3. This was 2.0 up from the low and 4.2 off the high.

November soybeans posted moderate gains late in the overnight session and slowly gave back its gains during the day session. A late push to the downside took the November contract lower on the day. Traders said that a sharply lower dollar provided a positive tone in the grains throughout the day with advances limited in soybeans by expectations of beneficial rains in a number of major growing areas in Brazil into this weekend. Amounts of up to 2 inches are expected in the southern starts of Parana and Mato Grosso do Sul where planting is well advanced and soil moisture levels are generally adequate. Rain is also forecast for much drier areas in Mato Grosso, the largest producing state in center-west Brazil. The Brazilian crushing industry association, Abiove, forecast this upcoming crop at 67.9 million tonnes, down from last year’s record 68.7 million. They also forecast Brazil’s soybean exports for the upcoming February through January 2011/12 industrial year at 31.6 million tonnes, up from an expected 29.8 million tonnes during the year that is still underway. The USDA’s weekly Export Sales report showed US soybean sales at a 10-week high at 2,025,800 tonnes and this was also viewed as supportive. China and unknown were the biggest buyers with a combined total of over 1.720 million tonnes. As of October 21st, cumulative soybean sales stood at 66.1% of the USDA forecast for 2010/2011 versus a 5 year average of 43.4%. Net meal sales came in at 153,900 tonnes. Cumulative soybean meal sales are at 35.1% of the USDA forecast for 2010/2011 versus a 5 year average of 26.4%. Net oil sales were 5,500 tonnes. Cumulative oil sales are at 60.1% of the USDA forecast for 2010/2011 marketing year, more than 3 times the 5-year average of 19.0%. In addition to this week’s regular Export Sales report, the USDA also announced a sale of 305,000 tonnes of US soybeans to an unknown destination this morning.

10-28-10 – Corn Market Recap Report

December corn moved higher during the second half of the overnight session before giving back most of its gains during the day session. The erosion during the day session came despite a sharply lower dollar. Some traders expressed disappointment over a somewhat soft export sales total for corn on this week’s report from the USDA. Traders indicated that reports of increased fertilizer sales are also confirming traders’ expectations of increased corn acreage next spring. The International Grains Council lowered its forecast of 2010/11 world corn production by 10 million tonnes to 814 million tonnes this month due to a reduced crop outlook in the US and China. While export sales remained on the soft side this week for corn, they were more than double last week’s very disappointing total of just 212,500 tonnes. Net weekly export sales for corn were 550,800 tonnes for the current marketing year and minus 500 for the next marketing year for a combined total of 550,300. Japan and South Korea were the biggest buyers. As of October 21, cumulative corn sales stand at 38.9% of the USDA forecast for 2010/2011 versus a 5 year average of 35.7%. Sales need to average 690,000 tonnes each week to reach the USDA forecast. 

December Corn ended up 1 3/4  at 579, 6 1/4 off the high and 3 3/4 up from the low.

March Corn settled 1 3/4 higher at 592. This was 6 off the high and 3 1/2 up from the low.

November Rice ended down 0.105 at 14.77, equal to the low and 0.2 off the high.

After reading ï»¿today’s analysis,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 futures market education.

The daily commentaries provide an analysis of the factors that influenced price activity, a recap of any reports released that day, a recap of each commodity’s traded price activity, and a look ahead at the schedule for the next day.  CME Group provides market commentaries for soybeans, corn, wheat, 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, broker, asset manager, trader, and analystfor Commodity & Derivative Advisors, located in Sandusky, Ohio.  For that reason, Andy Waldock may have positions for himself, his relatives, or his customers in any commodity future market discussed. The blog is meant to develop a dialogue and educate those with an interest in the commodity future markets. The commodity markets may not be appropriate for all investors due to the high degree of leverage.  There is considerable risk in investing in commodity futures.  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.