CHICAGO - Jul 28/10 - SNS -- Following is the morning corn futures comment from the futures commission brokerage firm Linn Group.
The corn market closed lower on Friday as the weather remains excellent for most of the Midwest and with everyday that passes, weather becomes less and less a factor. The December corn closed down about 6 cents near the lows of the session. For the week, corn was down about 22 cents and it might have been worse except the wheat market remained stronger and probably helped hold corn prices higher. There are still some problem areas in the Midwest, but there are a lot of farmers that are seeing excellent crops and just can't believe we aren't going to have big yields and lower prices. The world fundamentals remain positive as there will be a bigger demand for corn because of the reduction in feed wheat, but right now, higher yields = lower prices. The corn market also saw the funds liquidate their new positions as many funds were not willing to wait out the corn market and see if it found any support. Traders also said there was technical weakness as the September contract traded below some averages and we closed below from the previous week. The volume was lighter at only 195,000 contracts and funds were sellers of about 8,000 contracts. Overnight, the corn market opened lower and traded as much as 4-5 lower before recovering and closing about 2 cents lower in the middle of the trading range. There were some big rains across some areas which will cause flooding and some damage, but the areas aren't great. There isn't a lot of new news this morning so traders are mostly looking at weather and technicals and right now, there isn't anything bullish. The weather remains pretty good across most of the Midwest with some of the dry areas shrinking as they received rains over the weekend. Seasonally, the 2nd half of July usually has corn prices going lower which could be weighing on the market. Crop condition comes out today after the close and the market is looking for steady or possibly a slight improvement in the good/excellent ratings. The market is starting to build in a bigger corn yield and expect the USDA to confirm this on the August report because that is the first time the USDA actual does some crop survey's. The corn market will be called about 2-3 lower this morning and then look to see if it can hold the lows from last night. The outside markets are quiet with stocks around unchanged, crude down 50 cents and the US$ down about 20 points. Globex Overnight Contract Last Net Change High Low Volume ZCU10 368^6 -2^4 371^6 366^6 5403 ZCZ10 382^4 -2^0 385^4 380^4 9174 ZCH11 395^2 -2^4 398^2 394^0 1587 Early Opening Calls: off 2-3 cents Top News -- Many analysts expect Monday's USDA crop progress report to show little change in Corn & Soybean conditions this week. Last week Corn in the good to excellent was 73%, while Soy in that category was 65% good to excellent -- Head of China based JC Intelligence reportedly suggests Corn imports by China this year will be 1.7 mln mt, climbing in 2011 to 5.8 mln mt and possibly as high as 15 mln mt by the 14/15 MY based on feed livestock demand created -- Head of JC Intelligence reportedly also sees DDG imports by China this year will be in a range of 1.7-1.8 mln mt. Consumption of meat is expected to grow to 61.7 kg per person this year and in 2015 to 63.1 kg per person -- Belarus ag ministry says as of July 23, 1.73 mln mt of grain had been harvested, that represents about 23% of total area harvested. Last year at this time they had harvested only 234,000 mt -- 17.5 mln mt of grain have been harvested as of July 23 in Ukraine, acc. to the country's Ag Ministry. Last year at this time nearly 19 mln mt had been harvested. 10.7 mln mt of Wheat & 6.1 mln mt of Barley have been brought in so far. Avg wheat yield is 2.72 mt/ha, barley yield is seen at 2.11 mt/ha -- Saudi Arabia's trade ministry says in the 10/11 marketing year, the kingdom is expected to import 2.7% less Barley, bring the total to 7.5 mln mt by July 2011. -- According to growers group, Spain's wheat harvest nearly 70% finished while 60% of the barley crop has been brought in from the fields -- USDA on Friday announced list of 27 US poultry facilities allowed to export to Russia under new terms hammered out in June. Some packers allowed include Pilgram's Pride, Sanderson Farms & Tyson Foods -- Pending Tender: Cyprus seeking 60,000 mt of opt origin Barley, with an option for 12,000 mt additional, in a tender that closes on Monday, July 26. Shipment is expected between Sept 15 to Feb 10, 2011 -- Dalian Jan corn futures were 5 yuan better at 1,933 yuan/mt. -- Liffe Nov corn futures were off -2.00 euro at 166.00 euros/mt. -- Globex Corn Vol: 180,107; Pit Vol: 10,134; Open Interest change: + 150 -- Weather: 6-10 Day Forecast: Above Normal Temps. Normal to Above Precip. -- Outside markets: Energy Complex -0.74 at $78.24; Gold & Silver: +0.5 at $1190.2 & +0.024 at $18.125; US $ -0.159 at $82.470 Cash Markets -- CIF Corn steady off 2. July +?? to +34, Aug. +?? to +38, Sept. +50 to +52, Oct. +48 to +52, Nov. +49 to +52, Dec. +52 to +56, Jan. +41 to +45 TREND: Corn has too many weather bears here. CZ fell through the 3.85 level late on Friday. This implies more of a down side correction but this level will still hold some magic if we get right back above it? Still unfinished counts to around 4.25. Futures trading involves substantial risk of loss and is not suitable for all investors. Past performance is not necessarily indicative of future trading results. Trading commentary and analysis is based on information taken from trade and statistical services, news services, and other sources which we believe to be reliable. We do NOT warrant that such information is accurate or complete, and it should NOT be relied upon as such. Our policy is to publish market research that is objective, clear, fair, and not misleading. Trading commentary and analysis reflects our good faith judgment at a specific time and is subject to change without notice. There is no assurance that the advice we give will result in profitable trades. All trading decisions will be made on a strictly unsolicited basis by the account holder. If you have any questions or want to discuss specific trade recommendations, contact me directly. Jim Riley Linn Group 877-787-6278 jriley@linngroup.com www.linngroup.com/
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