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Archived Market Commentaries:
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Date:
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11-19-09
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Headline:
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Closing Grain Comments
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Comments:
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A rebound in the US dollar & Wednesday's reversals of early session highs had spurred follow-thru sales in grains last night, but export news forced soybean traders to reassess their bearish by Thursday's open. After USDA reported very strong weekly export soybean & soymeal results & 4.262 mb of daily bean sales to China, soybeans reversed overnight losses on the open. Soybean strength thru the day eventually spilled over to help corn & wheat trim their overnight losses. Dec corn closed with a mid-range 3c loss. Jan beans settled with a mid-range 12c gain. Dec CBOT wheat rebounded to end with a mid-range 3.75c loss. Chartists will view lack of downside follow-thru on Thursday as helping moderate Wednesday's poor price performances.
In this morning's Weekly Export Sales data, USDA reported 49.592 mil. bu. of soybeans were sold to foreign buyers last week--well above trade expectations that ranged 25.7-36.7 mb. China purchased 26.627 mb, but Mexico, Indonesia, Egypt, Taiwan & Iran each bought at least 2.38 mb, too. US soy products export sales are supporting crush rates. USDA reported that 357,400 metric tonnes of old-crop soymeal were sold last week--far above the trade's 100,000-225,000 mt guess--while sales of soyoil were moderate at 12,500 mt (vs 5,000-20,000 mt). Soybean sales have reached 956.5 mb--72.2% of USDA's 1.325 mb 2009-10 export forecast & 299.6 mb higher than ever before for marketing week #11. Total sales to China have reached 582.1 mb--within striking distance of the record-large 686.4 mb of US beans seen in 2008-09. Cumulative sales of soymeal & soyoil exports are also record-large for marketing week #7 by huge percentages. By contrast, sales of corn & wheat continued to be disappointing last week. USDA reported sales of corn at 13.905 mb (vs 13.8-23.6 mb expected) & wheat at 13.319 mb (vs 11.0-18.4 mb). Corn sales made since Sept 3 are the second worst since 1979, & cumulative wheat sales at week #24 are only .2 mb above the worst level since 1979. This morning, Egypt again bypassed US offers & instead bought 2.205 mb of wheat from both Russia & France & 2.021 mb from Germany.
Looking ahead, Friday is last trading day for options on Dec corn, soy product & wheat contracts. Prices often gravitate towards high open interest strike prices ahead of expiration as option buyers & sellers try to minimize their exposure. Regional harvest conditions will improve thru the weekend as drier, warmer weather arrives. Having missed the central Midwest rain system, many areas of the NW Corn Belt have continued to harvest corn this week.
Nearby corn basis rallied a penny & soybean & wheat basis was steady this afternoon. Barge freight has fallen back this week to levels last seen in mid-September. Trade sources say freight buyers are now trying to resell excess commitments they made for the harvest glut that never arrived.
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.
"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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