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Archived Market Commentaries:
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Date:
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1/09/09
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Headline:
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Closing Grain Bids & Comments
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Comments:
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Top Ag Closing Prices: 01/09/09
Cash Price New Crop
Corn: $3.73 $3.85
Soybeans: $10.18 $9.38
Wheat: $4.88 $5.48
Prices are subject to change without notice. Please call Scott, Mike, or Seth at 243-5293 to get off-the-farm or direct-to-terminal bids. Our elevator hours are Monday thru Friday, 8:00 am-4:30 pm during the winter.
Closing Comments: 01/09/09
Weather maps downgraded rain chances for early next week's in central & eastern Argentina & western Rio Grande do Sul, Brazil & the soybean market exploded higher on Friday. Grain traders in Argentina report that the Argentine soybean crop is just 87% planted--7% behind last year--as dry soils impede the completion of sowing. Traders expect USDA to trim US soybean & corn output in Monday morning's Annual Crop Production report. Corn in many areas of Argentina is nearing pollination, & their weather stress lifted corn a dime higher in early trading today. Expectations that USDA would forecast reduced US corn exports & rising ending stocks in Monday's Supply/Demand report eventually trimmed that rally. Wheat followed soybeans higher today as traders worried that bitterly cold temps forecast for next week might harm the soft red winter wheat crop. Wheat also derived support from expectations Monday's Winter Wheat Planting Intentions report will show US farmers sowed about 1.9 million fewer SRW wheat acres last fall. March corn futures settled 4c higher today, March soybeans soared 46.5c higher, & March CBOT wheat closed 17c higher. For the week, nearby corn futures declined 1.5c, soybeans surged 67.75c higher, & wheat gained 18.5c. Weekly soybean, soymeal, & wheat charts have now closed higher for 5 straight weeks.
Average analyst guess for Monday's 7:30 am reports foresee USDA trimming 2008 corn production by 38 mb to 11,982 mb & soybean output by 11 mb to 2,910 mb. Late planting & difficult harvest conditions left some corn still to be harvested in N Dakota & parts of the northern Plains at the end of 2007. Traders expect USDA to reflect those woes in both its production & Dec 1 stocks estimates. Dry weather in the western Corn Belt is seen trimming soybean yields, but mid-South bean yields were much better than expected. If there is a soybean output surprise, we guess it will be that better lower Ohio Valley yields offset WCB declines.
In its Supply/Demand reports, analysts expect USDA to trim corn exports further, but there is debate whether ethanol crush will be lowered again. Since USDA dropped ethanol crush 300 mb in December, any additional ethanol crush decline is likely to be partially offset by feed use increases. In soybeans, most analysts expect USDA to raise exports & decrease crush slightly since those are the usage trends that appear to be in place. Ending wheat stocks are seen falling due to better feed & export demand. Overall, soybean stocks are expected to be tight, corn carryover to be ample, & wheat stocks to still be burdensome. Unless there is a real "shock", however, Monday's Argentine weather maps may ultimately trump the USDA data. One should expect Monday to be a highly volatile day with uncertainty aplenty.
Basis levels turned sharply lower today in delayed reaction to this week's 13c/bushel rebound in barge freight. Because next week's projected Midwestern cold snap may cause transport woes on the Illinois River, terminals aggressively bid for barges to load them as fast as possible ahead of that event. Spot corn basis dropped 7c & soybean basis tumbled 11c, but local wheat remained stable this afternoon. For the week spot corn declined 11c, cash beans rallied 55c, & nearby wheat jumped 14c.
Be sure to check with your local Top Ag Agronomy Center for pre-season price 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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