The corn market sank sharply lower today led by losses in the December contract following a midday weather forecast that pushed more rain to the west and offered cooler temperatures by the end of July.
The market traded lower in light volume overnight but the market saw confirmation from the USDA that US exporters sold 960,000 tonnes of new crop corn to China this morning and traders sold into the news as the rumored sale was reported earlier this week.
The demand is seen as a positive development however the market had apparently built enough demand and weather premium into the complex ahead of the weekend so profit taking helped to send futures lower.
The weather forecast leans a little more negative towards price direction into next week but temperatures will still creep higher into the mid-90s for areas of OH, IL, and MO.
Rainfall is still needed to the west but good conditions in the eastern Corn Belt helped to countervail.
September Rice finished down 0.175 at 15.205, 0.235 off the high and equal to the low.
Soy Futures Closed Lower
August Soybeans finished down 43 at 1429, 49 off the high and 3 up from the low.
November Soybeans closed down 33 1/2 at 1257 1/4. This was 2 1/4 up from the low and 39 3/4 off the high.
August Soymeal closed down 15.1 at 442.9. This was 0.9 up from the low and 18.7 off the high. August Soybean Oil finished down 0.31 at 46.22, 0.53 off the high and 0.21 up from the low. The soybean market collapsed at the opening bell and losses extended into the end of the session on a more favorable weather outlook into next week and into late July.
The July contract had an extremely wide and volatile range today as it expired. The eastern Corn Belt soybean basis fell like a rock with some indicating increases in farmer sales. Cash crush margins remain very healthy for central US processors with NOPA crush being reported on Monday. Many traders expect to see a strong pace of crush for these reasons.
Meal and oil traded down with soybeans on profit taking ahead of the weekend. Soybean oil continues to deal with its own set of bearish fundamentals with Argentina and Malaysian oil offers trading at a rather large discount to US oil. Furthermore, with the strong US crush and lack of exports, some expect to see a healthy US inventory of oil on Monday's NOPA report.
Wheat Futures Closed Lower
September Wheat finished down 2 at 681, 6 3/4 off the high and 2 up from the low. December Wheat closed down 2 3/4 at 693 3/4. This was 1 1/4 up from the low and 7 1/2 off the high.
Wheat futures traded stronger throughout the session as corn and soybeans dropped by double digits. The US Dollar was sharply higher which may have sent some moderate resistance into commodity markets but wheat futures continue to see buying support in the aftermath of the bullish USDA report. Bull spreading was noted in wheat vs. corn spreads.
Strong Chinese demand and a huge cut to world ending stocks for 13/14 are supportive factors but bears still point towards near record large production this year. A farm coop in Germany estimated their harvest at 24.07 million tonnes of wheat in 2013/14, up 7.5% from 22.38 million tonnes in 2012. That was slightly higher than their June estimate.
Harvest will advance in the west this weekend with many producers uninterested in selling additional grain out of the field given the drop in board prices.
This, along with strong feed and export bids from the Texas Gulf has helped support cash markets throughout the week.
September Oats closed down 4 at 352 1/4. This was 1/4 up from the low and 5 off the high.
