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Archived Market Commentaries:
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Date:
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1-14-09
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Headline:
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Closing Grain Comments
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Comments:
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After having posted solid gains in overnight trade in response to higher crude oil, S American weather forecasts, & a slightly lower US dollar, grains gave back those gains to open fractionally mixed this morning. By the 9:31 am, crude oil had turned 3% lower after weekly crude oil & distillate inventories proved larger than expected & New York stocks had dropped 3% on news of poor December retail sales. Soybeans gave back their overnight 17c gains on disappointing soybean processing data. National Oilseed Processing Assn members reported they crushed only 134.8 mb of soybeans last month. That was 4.6 mb less than in November, 5.4 mb fewer than analysts had expected, a 21.1 mb decline from last year, & the lowest December crush since 1996. Soyoil stocks still climbed compared to end-November totals as bio-diesel producer profits remained under pressure & soyoil exports dwindled. Grains trended lower until about 10 am, rallied back to session highs during the next half hour, & then meandered within those parameters for the balance of the day. Dry weather in Argentina continues to underpin prices, but rallies were again stalled by worries about recession-reduced demand. March corn futures rallied 4c today, March soybeans settled unchanged, & March CBOT wheat closed 3.5c higher.
Looking ahead, traders expect USDA to report weekly corn export sales at 11.8-21.7 mb, bean sales at 14.7-22.0 mb, & wheat sales at 7.3-14.7 mb tomorrow morning. With a 3-day weekend looming, markets will stay nervous about Argentine weather. US corn & bean traders have more than once traded a hot & dry forecast ahead of a long 4th of July weekend only to walk to work in the rain three days later. Some weather forecasters see .1-.5" of rain with 50-65% coverage in Argentina this weekend, & then hot/dry weather all next week. Others warn that rain totals may be heavier than that this weekend, but still see stressful conditions thereafter.
Barge freight surged 8c higher today, & basis levels tumbled 5c on corn, 8c on beans, & 10c on wheat this afternoon. Barge freight has nearly doubled from the lows it reached on Jan 5, & local basis levels have suffered from that rise. As cold temps slide away, the next hurdle will be getting the barges that have been loaded the past two weeks to the Gulf & then returned.
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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