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Archived Market Commentaries:
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Date:
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11-18-09
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Headline:
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Closing Grain Comments
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Comments:
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Grain futures ran higher in early trading this morning as the US dollar ranged towards Tuesday's lows & crude oil rebounded near $80. Wheat, then soybeans, & finally corn stalled as trading fund flows were eventually exhausted. Profit-taking ensued for the balance of the session, & grains ebbed near their lows into the close. It will take additional trading sessions to prove whether a short-term top was set today or the current rally is merely pausing to refresh itself. Grain news was limited during the session, but economic reports had a negative twist. The US Commerce Dept reported that October housing starts were down 10.6% & the lowest since March. The Labor Dept indicated October consumer prices increased 0.3% during the month--0.1% more than average economist expectation. Crude oil & gasoline inventories were below expectations--but still 6.1% & 5.1%, respectively, above last year--after Hurricane Ida disrupted Gulf oil production & refineries again cut their output due to poor processing margins. Hedge pressure continued to dribble into the market from harvest in the NW Corn Belt--most of which has received less than .25" of rain this week. Dec corn futures settled 4c lower today--11.5c below its 9:45 am, 3 1/2-week high. Jan soybean edged 2.5c lower & 22c off its 9:41 am, 3 1/2-month peak trade. Dec CBOT wheat closed 8.5c lower today, reversing 17.25c below the 3 1/2-month high it set at 9:36 am.
After today's close, USDA reported that US poultry producers put just 0.5% fewer broiler-type eggs in incubators & placed the same number of broiler chicks on feed last week as seen last year. Year-to-date, broiler numbers have been 4% below 2008. Egypt also issued a tender for optional-origin wheat for early January shipment this afternoon. Russia & EU has won most of the recent Egyptian business as US wheat remains priced out of the market by surging ocean shipping costs & the recent recovery in CBOT wheat futures.
Looking ahead, traders expect tomorrow's 7:30 am USDA's Weekly Export Sales data to report sales of corn at 13.8-23.6 mb, beans at 25.7-36.7 mb, wheat at 11.0-18.4 mb, soymeal at 100,000-225,000 mt, & soyoil at 5,000-20,000 mt. Corn & wheat sales have been very sluggish for the past couple months, but traders believe China & others were active buyers of US beans last week.
Barge freight continued to collapse on Wednesday as grain harvest remained subdued along the Mississippi River basin. Locally, corn basis rebounded 6c, bean basis surged 12.5c, & wheat basis recovered 4.5c on Wednesday. This week's weather delays have lifted cash bids much closer to December bids.
We wish to thank everyone who attended our Top Ag Annual Meeting on Tuesday, Nov 17th at the American Legion Hall in Albers. Your company earned record-high profits in the year ended August 31st despite a very challenging economic environment. We paid patronage refunds on the corn, soybeans, wheat, feed, dry fertilizer, chemicals, seed, & lumber products business that our many fine patrons did with us this year. We feel blessed by your loyal patronage & look forward to serving you again in the coming year. Contact your local Top Ag Agronomy Center for all your fall fertilizer & winter weed control needs.
"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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