1. U.S. CORN, SOYBEAN AND COTTON OUTLOOK AUGUST 20, 2009 Darin Newsom DTN Senior Analyst

2. To Have a Better Idea of Outlook - Market Structure
Two sides to every market
Noncommercial side of the market
Those not actively involved in underlying cash market
Fund traders, Investors, etc.
Opinion strongly influences futures trend
Commercial side of the market
Those traders involved in cash market
Reflect underlying fundamentals
Indicated by futures spreads

3. Soybean Market Structure
Noncommercial traders are long, but will it last?
Dow Jones facing a bearish quarter (October, November, December)
U.S. dollar index could find support as safe haven
Fundamentals neutral
Futures spreads have a weak carry
However, it has been strengthening of late
Large U.S. production projected
Offset by record U.S. and world demand projections
U.S. ending stocks pegged at a still tight 210 mb

4. Soybean Market Outlook
With the possibility of noncommercial selling increasing over the latter stages of 2009 and the fundamentals dealing with a possible large production number, soybeans could come under pressure.
Look for the November contract to find initial support near $9.60. However, as the marketing year wears on and world stocks are rebuilt soybeans could push dramatically lower.

5. Soybean Stocks: Tighter Than Projected?

6. Corn Market Structure
The noncommercial side of the market is growing less bullish as it reduces its net-long futures position.
Fundamentals are bearish.
The strong carry in the futures spreads reflects the idea production could be larger than the bb projected at this time.
12.76 bb is the second largest on record behind

7. Corn Market Outlook
The combination of light demand emerging could support the corn market just above last December’s low of $2.90. However, the type of demand showing up is not the type that will provide long-term support.
If the market moves below $2.90 it could quickly move back to the $2.50 to $2.30 area setting up a national average (U.S.) cash price near $2.00.

8. Corn: Is Demand Driven Market Over?

9. Cotton Market Structure
Noncommercial traders are growing less bullish as they begin to reduce their net-long futures position.
Fundamentals are bearish.
The strong carry in the futures spreads continues to reflect decreasing world demand.
Yes, world supplies also continue to go down but the market seems to still be comfortable with the long-term supply and demand situation.

10. Cotton Market Outlook
The structure of the market (commercial and noncommercial indicators) is turning more bearish. This would imply that the market could begin to move into its seasonal downtrend.
The target for the spot futures contract is between cts and cents.

11. Cotton: The Trend Seems to be Changing

12. Conclusion Soybeans – Bullish Corn - Neutral to Bearish
Much will depend on direction of U.S. economy in 2010 and strength/weakness of U.S. dollar
Market structure will continue to give us good indications of what type of market exists.
Soybeans – Bullish
Corn - Neutral to Bearish
Cotton – Bearish

13. 2009 U.S. Crop Outlook
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