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Archived Market Commentaries:
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Date:
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1-07-09
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Headline:
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Closing Grain Comments
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Comments:
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Profit-taking dominated the activity in most financial markets on Wednesday, & grain prices were not immune to the trend. With crude oil falling more than $5/barrel, the Dow Jones Industrial Average reversing all of its 2009 gain, gold down $24/oz, & rain in the forecast for Argentina & southern Brazil by early next week, grains opened & closed with sharp losses today. Farmers have used the early year rally to add to sales, & today's reversals made that looked like a wise decision. Whether a short-term top has been posted will be strongly influenced by Monday's USDA reports & next week's South American rain results. March corn futures closed 11c lower today; March soybeans settled 26c lower, & March CBOT wheat closed 30.25c weaker. Those looking for less volatile trading in 2009 will have to keep looking!
After the close Egypt announced it was seeking more than 2 mb of optional-origin wheat for February shipment & at least another 1 mb of Russian, Ukraine, United Kingdom or Syrian wheat for February loading. Results are expected ahead of Thursday's CBOT open. Japan is also seeking 3.89 mb of US wheat & .77 mb of Canadian wheat tonight in a tender announced Tuesday. S Korean feed mills bought 1.77 mb of Brazilian corn today--bypassing US supplies. In the first 17 weeks of the 2008-09 marketing year, S Korea has purchased 134.8 mb (-69.6%) less US corn than in 2007. Traders expect USDA to report weekly export sales for corn at 9.8-19.7 mb, beans at 13.8-22.0 mb, & wheat at 7.3-18.4 mb Thursday morning.
Analyst expectations for Monday's USDA reports were released this afternoon. On average, analysts expect corn production at 11,982 mb--down 32 mb from November. Soybean output is guessed at 2,910 mb--down 11 mb. Analysts foresee USDA increasing 8/31/09 corn carryover by 15 mb to 1,489 mb, lowering soybean carryout by 19 mb to 186 mb, & decreasing 5/31/09 wheat ending stocks by 23 mb to 600 mb. Winter wheat acreage is guessed at 44.178 mil.ac.--down 2.003 mil.ac. from last year. Soft red winter wheat acres are seen at 9,381 million--down from last year's 11.2 mil.ac.
An increase in farmer grain sales sent barge freight edging higher today, & local basis levels declined 2c on corn, 1c on beans, & 3c on wheat this afternoon. Basis recovery has been very strong since harvest, but it's taken a virtual halt in farmer sales--not strong end-user demand--for it to happen.
Be sure to check with your local Top Ag Agronomy Center for pre-season seed, fertilizer, & chemical pricing opportunities. Need financing? Give Lloyd a call at 243-5293 or contact your local Top Ag Agronomy Center at Okawville, Trenton, or Pierron.
"Closing Comments" are written by David Marshall, Toay Commodities Futures Group LLC, Nashville, IL. To learn more about his services, contact him at dmarshall@tcfg-llc.com or call (618) 327-4370 (voice/fax) or (618) 314-0918 (cell). This commentary is not intended for specific trading strategies. We strive to insure this information is reliable, but we cannot guarantee its accuracy or completeness. Commodity trading involves risks. You should fully understand those risks before trading.
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