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Archived Market Commentaries:
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Date:
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01-29-09
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Headline:
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Closing Grain Comments
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Comments:
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Weak crude oil futures, stock market losses, & a rising dollar provided a headwind for grains today as markets appeared willing to believe Argentine crop conditions are improving. Corn opened in line with overnight losses despite a solid weekly export sales report, but managed to trim losses into th close. Beans mostly sustained its overnight losses today after monthly soybean crush & weekly export sales proved unsurprising. Marketing-year-low wheat export sales--mostly due to last week's cancellation by Nigeria of previously booked old- & new-crop wheat purchases--helped trigger profit taking on long wheat-short corn spreads that kept wheat futures under pressure today. Wheat had gained nearly 48c on corn since January 20th, & traders decided to take some profits to the bank. March corn futures closed 2.75c lower, March soybeans settled 12c weaker, & March CBOT wheat slid 17.25c lower.
The Census Bureau issued a slightly friendly December soybean crush report today. Processors crushed 141.366 mb of soybeans--slightly above the 141.0 average analyst guess, but 22.543 mb below last year--& soymeal & soyoil stocks that were slightly below expectations. Total bean crush since Sept 1 is 69.534 behind last year as hog & poultry producer have cut production & soy product exports have slowed. Weekly export sales for corn (43.615 mb), soymeal (201.600 mt), & soyoil (21,600 mt) were above trade estimates & bean sales (19.554 mb) were at the low end of expectations. Last week's Nigerian cancellations pushed old-crop wheat sales (.863 mb) to a marketing year low & new-crop sales to a net cancellation (-2.939 mb). Analysts had expected weekly corn export sales at 13.8-35.4 mb, bean sales at 18.4-33.1 mb, wheat sales at 11.0-18.4 mb, soymeal at 75-200,000 tonnes, & soyoil sales at 0-15,000 tonnes.
After the close, Egypt tendered to buy 2 mb of optional-origin wheat. Today's lower prices may make US wheat affordable.
After having seen rain earlier this week, Argentina & southern Brazil are seen receiving .25-.75” rainfall with some isolated heavier totals & coverage of around 75-80% by early next week. Yet another similar system is then forecast by the following weekend. Temps are seen in the 80’s & low 90’s across most of their growing region thru the weekend with next week's temps mostly in the 80’s. With this week's sell-off, traders are betting recent weather improvement has stabilized Argentine corn & soybean crop potential.
Basis levels continued to rebound sharply today as the lower CBOT halted farmer sales & sent barge freight tumbling lower. Locally, corn basis jumped 6c, bean basis rebounded 4c, & wheat basis soared 10c today. As is often the case, late January has brought basis improvement to St Louis area markets.
As you make you spring planting plans, be sure to check with your local Top Ag Agronomy Center for pre-season price opportunities & the latest in agronomic practices. 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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