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Wheat hits highs

Wheat Wheat ended the day sharply higher June 1 soaring to eight month highs on strength from outside markets. The falling U.S. dollar partnered with gains in crude oil and stocks pushed wheat higher for the day. Fund buying added to the momentum...

Wheat

Wheat ended the day sharply higher June 1 soaring to eight month highs on strength from outside markets. The falling U.S. dollar partnered with gains in crude oil and stocks pushed wheat higher for the day. Fund buying added to the momentum with commodity funds buying 6,000 contracts on the Chicago Board of Trade. In addition, gains in corn and soybeans, short covering and technical buying added some underlying support. Because of recent strength Pro Ag is advised producers to consider advancing sales by an additional 10 percent.

Wheat ended the day with moderate losses June 2 in winter wheat and slight loses in spring wheat markets. After June 1's soar to eight-month highs the market turned to profit taking on the idea that the market is overbought. With the gains, there were concerns that U.S. wheat has priced itself out of the global market. This continued throughout the day until a rally at the close which helped trim losses.

By midweek, wheat continued with sharp losses on profit taking, following the trend from June 2. Adding to the downward pressure was the outside markets. Crude oil is moved lower and the dollar was higher, not providing any underlying price support. While corn and soybeans were getting some underlying support from fundamentals, wheat was falling more sharply with no fundamentals to help trim losses. The funds are adding to the pressure with an estimated 7,000 contracts being sold on the Chicago Board of Trade June 3 by commodity funds.

The market turned around again June 4, despite disappointing export sales to finish out the marketing year. Wheat finished the day sharply higher as buying interest returned to the market after a couple of days of losses. After June 3's sharp losses on the Minneapolis Grain Exchange, the exchange turned around and led the upward movement and finished with the sharpest gains for the day. With speculation that the market was oversold, and supportive outside markets, wheat followed the other grains higher.

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Corn

Corn futures were slightly higher (ending June 4). The corn market ended about 10 cents higher than the close last May 29. The weather, stronger crude oil futures and the weaker dollar supported this market.

The market started the week higher and closed with 8 to 9.75 cent gains over May 29's close. Corn was influenced by the outside markets and the strength in the soybean and wheat markets. The dollar was down and crude was stronger trading above $68 a barrel. The session had corn on the defense right from the opening bell June 2. The market traded with modest losses throughout the session with little news to give the market direction. June 1's afternoon's Crop Progress report was both friendly and negative to corn (planting progress remains behind normal progress but the crop rating was much higher than expected), so little direction came from it. It appeared the a turnaround type session was going to be in order, but the corn market surprised all when it rallied on the close to end with small to moderate gains.

We saw the corn market take a breather in midweek with 17-cent losses, only to turn around and recover what we lost. It was positive to see this market make a correction and then come back the next day. The upturn June 4 was further supported by the strength in the soybean and wheat markets in addition to stronger outside markets. The selling off June 3 was technical in nature as this market has traded higher for quite a few session in a row and a correction was very much needed to clean the market up. This was more than offset June 4 as corn gained back almost all of the previous day's losses. There still are concerns as to the amount of acres that are going to be planted to corn. The actual number will not be known until June 30, but once this estimate is published, expect a change in the corn market. Reports have many in the Illinois and Indiana continuing to plant corn through next week.

Export sales seem to continue to expand for corn, with a decent week of sales this week that are putting a more positive spin on exports. Weekly export sales were decent at 23.9 million bushels old crop (down 5 million bushels from last week), and 2 million bushels new crop (down 8 million bushels from last week). It looks like the new, higher projected exports and growing demand is becoming a reality in corn. Growing demand and shrinking supply usually mean higher prices, and that is exactly what the market is doing for now.

Soybeans

Soybeans started the session sharply higher June 1 and maintained most of the session's gains throughout the session. Early support was a result of spillover strength from the overnight session but light support also was a result of spillover strength from the outside markets. The dollar remains sharply lower and with the Dow and crude oil market higher, it seemed logical that the soybeans market would join in. The funds were a major buyer and it appears that the funds, that have money and that have been out of the market for some time, are now starting to re enter the market.

The market moved lower June 2 under profit taking after June 1's gains. The market continued bearish for the day with a rally at the end, just enough to trim some losses. It is estimated that commodity funds sold 4,000 contracts adding to the downward momentum. Soybeans are provided with some underlying support from concerns over the U.S. crop. Also limiting loses are the fundamentals, with strong Chinese imports and tight old crop supply because of the poor crop in Argentina provided support.

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The market continued moving in a bearish direction June 3. Soybeans started lower in the overnight session because of profit taking after June 1's strong gains. The higher dollar and lower crude oil added to the bearish trend. The market is seen to be overbought and traders are trying to correct that. Despite the day's losses the market still is getting some underlying support from fundamentals.

The market turned around with the other grains June 4. Soybeans were sharply higher for the day overcoming the bearish export sales report from that morning. The strength was enough to push old crop contracts to new recent highs. After two days of sharp losses and with supportive outside markets, higher crude oil and metals, soybeans were able to make significant gains today. Continuing to lend underlying support is the fundamentals, with U.S. crop concerns and tight world stocks keeping prices from falling.

As of May 31, 66 percent of the nation's soybean crop was planted compared with 48 percent last week and 79 percent for the five-year average. Emergence is estimated at 36 percent compared with 17 percent last week and 51 percent for the five-year average.

Barley

USDA estimated last week's barley shipments at 24,000 bushels with all of the bushels going to Mexico. This brings the year-to-date export shipments total for barley to 11.3 million bushels compared with 37.5 million bushels for last year at this time. USDA estimated last week's barley export sales pace at a negative 100,000 bushels (cancelation). This brings the year-to-date export sales pace for barley to 10.8 million bushels compared with 41.9 million bushels for last year at this time. This report marks the end of the 2008 to '09 barley export year. USDA projected this year's exports at 14 million bushels. As of May 31, 87 percent of the nation's barley crop had been planted compared to 77 percent for last week and 98 percent for the five-year average. Emergence is at 60 percent compared with 40 percent last week and 88 percent for the five-year average. Barley first crop condition rating for the year has the crop rated at 72 percent good-excellent, 25 percent fair, and 3 percent poor-very poor. This compares with 58 percent good-excellent, 37 percent fair, and 4 percent poor-very poor for last year. Cash feed barley bids in Minneapolis are at $2.90 while malting barley bids remained unchanged at $4.75.

Durum

USDA reported no durum export sales. This report marks the end of year estimate for the 2008 to '09 durum export year. The year-to-date export sales pace is at 16.9 million bushels compared with 40.2 million bushels for last year at this time. As of May 31, North Dakota producers had 85 percent of the states durum planted comparedwith 69 percent for last week and 97 percent for the five-year average. Emergence is at 47 percent compared with 29 percent for last week and 70 percent for the five-year average. The states durum crop is rated at 78 percent good-excellent, 21 percent fair and 1 percent poor-very poor.

Canola

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Canola futures on the Winnipeg, Manitoba, futures exchange closed higher for the week with most of the contracts gaining about $16 for the week. This is a large contrast to the previous week's activity when the canola market slipped lower. Strength spilled over from a sharply higher U.S. soybean and energy complex. Weather concerns added to canola's strength as cold temps have been in the forecast all week. The temperature drop was expected to move into much of Canada with some areas even expected to see frost. Gains were kept in check by a sharply higher weekly move in the Canadian dollar. As of May 31, North Dakota producers had 69 percent of the states canola planted compared with 56 percent last week, and 94 percent for the five-year average. Emergence is estimated at 28 percent compared with 17 percent last week and 76 percent for the five-year average. June 4's cash canola bids in Velva, N.D., ended at $19.17.

Sunflower

As of May 31, 31 percent of the nation's sunflower crop was planted compared with 16 percent for last week and 47 percent for the five-year average. Cash sunflower bids in Fargo, N.D., finished 40 cents higher to end at $16.10. Bean oil futures closed $1.40 higher. Cash sunflower bids in Fargo finished the week ending Thursday at $16.

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