Range bound wheat market
At the close of the side-by-side trade session on Friday floor trade estimates in number of contracts, suggest non commercials were even on the day for wheat, sold 3,000 corn, 3,000 soybeans, 500 soybean meal and 1,500 soybean oil.
Corn Fundamentals: With 56% of the corn pollinating as of this past Sunday and the five year ave suggesting 60% by next Sunday. The five year ave has been 35% and was 46% one year ago. The hot dry weather threat is losing its importance. Noon maps on Friday back peddled off the heat and dry weather forecast for the first half of next week and suggest cooler temps and increasing chances of rain for Iowa and Minnesota. Weather importance is expected to resurface to satisfy kernel fill and expected to keep futures volatile.
Subsoil Moisture: Abnormally to excessively dry for the majority of IN, OH, western IA, southern MN and MI, southeast SD. Everywhere else the official 5 foot soil profile map suggest slightly dry/favorably moist conditions. We will continue to monitor this particular map for improvement or failure as corn enters the kernel fill stage. Please take a minute or two and view today's Weather Watch page to see and read how top soil moisture changes have occurred. Update With Eight Weeks Remaining: updated Friday July 20th, with 8 weeks remaining in the 2006-07 marketing year, all but one of the top five US corn importers have bought less than year earlier levels. USDA estimates 54.340 MMT of US corn to be exported. Thus far the total amount sales commitments have reached 54.035 MMT. Of that total only Mexico has purchased more than year earlier levels with Japan down 7%, Korea down 21%, Taiwan down 7% and Egypt down 4%. With Mexico up 44% total sales for the top five thus far are 1% higher than last year 52.812 MMT. Equally interesting is how total new crop export sales have reached 5.120 MMT of the targeted 50.8 MMT total sales to all countries and of the 5.120 MMT already sold the top five importers mentioned above account for 53% or 2.700 MMT. We suggest these top five countries less than inspiring 2006-07 purchases do not want to make the same mistake for 2007-08 and are doing its best to grab a good piece of supply before the rest of the demand (such as feed and ethanol use) begins to drive prices higher.
New Crop Marketing: Based on our most recent price projections, Dec corn futures are in a downward correction and estimated to find a bottom near the 3200-3300 level. With Tuesday's low of 3314, Allendale suggest our downside correction objective has been met. Before Dec corn expiration futures are expected to work back towards 3700-3800 level. End users and producers, use the preceding information for your individual marketing needs.
Old Crop Marketing: A move to 3650-3700 vs the Sept futures is projected to complete old crop marketings. Midwest cash average price is $3.07 per bushel. Cost of carry on farm is estimated at 3.3 cents per bushel per month. Unless your cash market is willing to pay you to store the crop, signals suggest it does not pay to store the old crop inventory. Allendale sold its cash corn crop on May, 31, 2007 and was fortunate not to suffer the recent basis weakness.