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Archived Market Commentaries:
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Date:
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11-12-09
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Headline:
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Closing Grain Comments
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Comments:
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After having traded lower overnight on strength in the US dollar, rumors of vomitoxin problems in dried distillers' grains led to buying in soymeal on the open this morning that sent beans soaring & lifted corn & wheat as well. Many livestock feeders have been adding DDGS for protein. Since DDGS can triple corn toxins during processing, there was floor talk today that feed demand might shift back to soymeal as a protein source. USDA's announcement that China had purchased 4.262 mb of US soybeans was also a reminder that soybean exports remain at a record-high pace. With US soybean harvest likely to be about 90% completed by the weekend, harvest pressure will soon wane, too. Markets mostly shook off the impact of sharply lower crude oil & declining stock market prices. This morning's Energy Dept weekly inventory report showed that crude oil inventories, gasoline & distillate supplies all rose this week despite a decline in refinery output rates. When beans finally stalled, corn & wheat gave back their morning gains. With nearly 50% of the US corn crop still to be harvested & exports wavering, traders appeared to be selling corn as they were buying beans today. Dec corn futures settled 3.5c lower, January beans closed 18c higher, & Dec CBOT wheat closed unchanged.
Egypt once again bypassed US offerings & instead bought 10.838 mb of Russian wheat for Dec shipment this morning. While the results were not a surprise, it reiterated the dominance that Black Sea grain sources have had in both mill wheat & feed grains export sales recently. USDA's Weekly Export Sales report will be released on Friday. Traders expect USDA data to show last week's sales of corn at 15.7-27.6 mb, bean at 18.4-25.7 mb, wheat at 9.2-20.2 mb, soymeal at 75,000-200,000 mt, & soyoil at 5,000-25,000 mt. Given early season export trends, many analysts still feel USDA is still overly optimistic about corn & wheat exports despite the 50 mb & 25 mb cuts, respectively, they made to export projections Tuesday.
Steady/firm Gulf basis bids & another steep drop in barge freight costs led to firming basis levels on Thursday. Locally, corn basis rose 12c, bean basis gained 8.5c & wheat basis rebounded 10c this afternoon. Some Midwestern elevators have already begun piling corn on the ground. That hasn't been an issue in our region as farmers are still trying to finish up beans before they make a last harvest push on corn. With wet weather seen likely in the Midwest by Sunday-Tuesday, combines will be running hard ahead of then.
We hope you can attend the Top Ag Annual Meeting on Tuesday, Nov 17th at the American Legion Hall in Albers. Dinner begins at 6:30 pm & the shareholders meeting starts at 7:30 pm. If you have not yet done do, please call us with your dinner reservation on Friday 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 farm marketing advisory or commodity brokerage 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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