Post-report Reactions, 6-30-09

The corn data is a complete shocker. To offer perspective, the acreage figure is roughly 4 mil higher than many believed would be possible. This represents 600 mil bushels! This is more than half of pre-report expectations of new-crop carryout! Without a weather problem, traders will be seeking to redefine "big picture" downside potential.

Soybean data was supportive, but corn was so bearish that traders will be looking/hoping to sell soybeans on any strength, which may well mean no strength occurs.

Wheat will remain a follower.

Also, today's USDA data does much to rattle any speculator confidence in commodity inflation, which threatens to unleash long liquidation from another more "big picture" market participant.

Producers, especially those holding old-crop inventory, will be under intense pressure to make sales.

Today's report was a real killer and will likely keep prices under pressure into the July 4th holiday weekend. After that, we will need a weather concern to produce any meaningful upside potential.