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Archived Market Commentaries:
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Date:
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01-22-09
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Headline:
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Closing Grain Comments
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Comments:
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Overnight e-trade gains disappeared at this morning's CBOT open as grains were pressured by sharply lower crude oil & New York stock prices. Crude oil reversed overnight gains to decline nearly $3 at mid-morning after weekly inventories of oil, gasoline, & distillates proved far above trade guesses. The report implied that US energy demand is currently about 2.6% below 2008 despite sharp lower prices. Stocks were hit after this morning's weekly jobless data showed 589,000 workers filed initial claims for unemployment last week, & continuing unemployment claims reached 4.607 million--the largest since 1982. (Unemployed workers don't drive to the office or factory!)
Equity prices were further depressed by reports that December housing starts & building permits were record-low.
Grains continue to find underlying support from Argentine weather conditions. Forecasters are debating the speed of a frontal system that's due to cross Argentina starting Sunday night. The slower the system moves, the more likely that rain would be received. Consensus forecast expects .25-1.00" of rain with most locations getting .50" or less of moisture. Warm/dry conditions are then expected to return until about Feb 1st. Grains bottomed when crude oil hit its lows, & eventually trimmed losses to mid-range settlements. March corn futures settled 2.75c lower, but 9c above its lows. March soybeans closed 8.5c lower & 15c above morning lows. March CBOT wheat settled 5c weaker, but 8.75c off its low.
In export news today, S Korean flour millers bought 1.71 mb of US wheat, & Japan purchased 3.31 mb of US wheat & lesser amounts from Australian & Canada. Pakistan postponed until Jan 31 a tender for 9.19 mb of US soft white wheat that will use USDA GSM-102 credit guarantees. S Korea bought 2.16 mb of US corn & a like amount from Brazil. Israel rejected US supplies & instead bought .95 mb of European corn. Traders expect USDA to report that the US sold 15.7-23.6 mb of corn, 9.2-36.7 mb of beans, & 5.5-18.4 mb of wheat for the week ending Jan 15 in tomorrow morning's Weekly Export Sales report.
As farmers continued to hold tightly to grain inventories, Gulf bids stretched higher to attract grain & offset rising barge freight today. Locally, corn basis jumped 6c, bean basis rallied 2c, & wheat basis jumped a nickel.
As you make plans for wheat nitrogen application & you spring production needs, contact your local Top Ag Agronomy Center for the latest crop ideas & 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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