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Archived Market Commentaries:
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Date:
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01-26-09
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Headline:
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Closing Grain Comments
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Comments:
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The debate about rain potential in Argentina kept traders on edge & markets moving in wide trading ranges on Sunday night & Monday. Rainfall over the weekend was slightly more than expected on Friday, but most forecasts still see net drying in Argentine crop regions this week. Sharp losses in the US dollar, sharp gains in gold, & stability in crude oil & US stocks also supported grain values today. Wheat got a boost from news the Argentine government is limiting wheat exports due to drought-tightened stocks. Will Argentine corn & bean exports be similarly restricted if dry weather persists? March corn futures settled 3.25c higher & in the middle of its 18.75c trading range. March soybeans closed unchanged--32.5c below its 9:45 am peak--after having gyrated in a 50c trading range. March CBOT wheat settled 9.75c higher, but 18.35 below its early session high.
Parched Argentine corn & soybean crops are suffering their worst drought since 1961. Uncertainty about Argentine weather centers on whether the jet stream will shift closer to main crop areas. Extended weather maps hint of that possibility. If the shift occurs, it would raise both odds of more rain but also for hotter weather. The US Plains is also an area of increasing weather concern. Up to 73% of Texas is in drought, & 6-10 day weather forecasts see little improvement. Reflecting persistent dryness, wheat conditions were rated just 16% good-excellent in Texas last week.
Last week's export inspections were at the top of trade expectations for corn (27.35 mb) & soybeans (37.39 mb), & at the low end of trade guesses for wheat (14.867 mb). China was again the main soybean destination, taking 31.001 mb (81%) of last week's shipments. Cumulative marketing year corn inspections trail last year by 412 mb (617 vs 1,028 mb) & wheat shipments are 160 mb (712 vs 872 mb) behind the 2007-08 pace. Buoyed by Chinese purchases, soybean inspections are 65 mb (627 vs 562 mb) AHEAD of last year.
Corn basis declined a penny, bean basis dropped 2c, but wheat basis improved 4c Monday. Farmers have been more willing to sell soybeans during the past couple weeks, & supplies may be catching up with demand. Late January-early February often offer basis strength in St Louis versus Illinois River bids.
As you put your spring planting plan together, be sure to check with your local Top Ag Agronomy Center for the latest agronomy research & 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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