Morning Highlights
August 2, 2010
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Highlights

As of 6:30 am Central: S&P futures are up 13.50, gold is down $3.60, crude oil is up .75 to $79.70 and the dollar index is down .13.

The weekend weather brought a shot of rain to the upper Midwest and slightly below average temps; the 6-10 looks mostly benign with average temperature and precipitation being the norm.

Corn

The corn market looks like it is riding the coattails of wheat and beans higher. The underlying supply situation for corn seems to be unthreatened at this point, however a loss of barley and feed wheat exports out of the Black Sea should lead to an uptick in demand for corn in the world feed market.

Friday’s COT report showed that funds actually cut their long position in corn during the previous reporting period but still maintain a healthy position of long over 123k contracts.

Early Call…7-9 better following beans and wheat

Soybeans

Strong demand has the market seeing potential risk that the USDA’s 175 million bushel carry out could be under threat; it appears as though the market is pricing in a reduction in next week’s monthly government Supply and Demand report.

Malaysian palm oil closed at a three month high and Chinese soybeans finished their sessions higher as well.

No deliveries in the bean or meal markets, soy oil saw 2,828 contracts delivered.

Early Call…15-20 better on tight supply

Wheat

Milling Wheat futures are making new highs again in Paris as the spot month is trading €10.25 (36 cents/bushel) higher on continued dry weather in Russia.

In July, the Chicago wheat market had its best single month in terms of percentage of price gained since record keeping began in 1959.

Egypt’s state grain buyer, GASC, purchased 180k tonnes of Russian wheat over the weekend. The fact that Russia continues to export wheat should be encouraging, however prices have appreciated roughly $70 a tonne in the last month.

Early Call…25-30 higher following the European market

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Brian Liedl bliedl@countryhedging.com