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Archived Market Commentaries:
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Date:
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01-21-09
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Headline:
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Closing Grain Comments
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Comments:
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Grains rebounded to recover most of yesterday's losses Wednesday after other financial markets shook off Tuesday's blues, & weather & export news provided support. Grains were buoyed by near-term forecasts which see hot/dry weather in Argentina until Sunday. Although computer models suggest .25-.75" rain potential with 80% coverage there on Sunday, most forecasters then see a return to warm & dry conditions. Good weekly export inspections for soybeans & unexpected wheat sales to Egypt were a reminder that business is still being done. March corn futures settled 6.75c higher, March soybeans closed 28.5c higher, & March CBOT wheat ended 21.75c higher today.
How serious is the weather situation in South America? Argentine wheat acreage & yield were obliterated by months-long drought, & production plunged by nearly 50%. Corn acreage was also cut 20% below last year by dry weather, & now their corn is pollinating under stress. Corn exports may be halved. Argentina is normally the #2 world corn exporter. The Argentine Ag Ministry now projects that lingering drought will cut soybean acreage slightly below last year--down more than 6% from December expectations. Yield potential for both corn & soybeans are declining daily, & so is competition for US exports.
Export news was generally positive this morning. Weekly US corn export inspections were 26.681 mb--slightly above modest expectations that ranged 21-25 mb. Trade talk that Japan would be an active buyer of US corn in coming weeks helped improve the demand outlook. Beans got a big lift today from solid weekly export inspections of 37.025 mb--17.137 mb for China--& overnight sales to Taiwan. Incredibly, cumulative US soybean exports since Sept 1 exceed corn shipments. Egypt's decision to buy 2.20 mb of US soft red winter wheat in addition to similar amounts of French & Russian wheat gave CBOT wheat & Gulf cash basis bids a lift this morning. That news helped counter poor weekly export inspections of just 6.916 mb--about half the 11-17 mb range of expectations. Both Japan & S Korea are seeking US wheat tonight.
Corn & soybean basis rebounded 5c & wheat basis gained 10c today as Gulf export demand showed improvement. Farmer deliveries remain relatively light as Argentine weather prompts a more bullish outlook in the Corn Belt.
As you put your spring planting plans together, 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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