July Corn (ZCN9) – 404’0, unch
Opening Call: DOWN 1-2
Pivot Point = 406’0
July Beans (ZSN9) – 1197’2, -4’0
Opening Call: DOWN 2-4
Pivot Point = 1202’4
July Wheat (ZWN9) – 560’0, -5’6
Opening Call: DOWN 3-5
Pivot Point = 571’2
Weather will continue to dominate the intraday fluctuations, as the markets settle into a sloppy phase following reversals of their quarter long up-trends. China has cancelled bean cargoes for two consecutive weeks, and the squeeze in the near month appears less likely, as the spread (SN/SX) sits at major support around 166-167. A break and close below 166 could lead to an unwinding in the spread and should be a broad signal that the sector is turning and heading sharply lower. In our opinion, the July Soy Complex, while showing weakness of late, still needs a definitive break to mark the end of the 2009 grain rally.
Elevator bids for cash corn and winter wheat fell to 6 week lows Wednesday, crushed by weak basis and lower futures prices. Plenty of rain for corn growers is now considered beneficial, and it seems that we might get a nice hot spell which could also benefit yields. It appears that this markets back is broken, and should head to the $3.80 region over the next several weeks. The June 30th report might put a cap on corn’s downside, so watch for the market to run lower into the report. We are watching closely the Dec Wheat / Dec Corn spreads.
