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Archived Market Commentaries:
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Date:
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11-23-09
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Headline:
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Closing Grain Comments
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Comments:
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Renewed weakness in the US dollar prompted speculative buying in metals, energy & grain contracts overnight. Grains extended their gains in the first 15 minutes of today's session, but then stalled. Profit-taking emerged in many commodities for the balance of the session, & solid early gains eventually turned into modest losses. The day's most telling feature came after USDA issued its Weekly Grain Export Inspections report. When beans failed to rally despite huge weekly exports, traders decided to bail out of longs on "sell the fact" action. Dec corn futures closed with a bottom range 3.75c loss--15.75c below its early session high. Jan beans reversed an overnight 20.75c gain to settle with a low-range 4c loss. Dec CBOT wheat gave back its early session 20c gain to close with a bottom-range 2.5c loss.
Some of today's reversals may be attributable to the upcoming Thanksgiving holiday. The date has in the past marked low volume but volatile dealings as some traders take the last half of the week off. With harvest so delayed, however, this will be a more active than normal corn harvest week.
Weekly Grain Export Inspections were again disappointing for corn (25.562 mb) & wheat (15.496 mb) this week. With the marketing year now 12 weeks old, corn inspections are a mere 7 mb above last year. USDA currently expects 2009-10 corn exports to exceed last year by 342 mb--2,100 mb vs 1,858 mb. That's a lot of catching up to do! Cumulative wheat exports at marketing week #25 have reached just 409.7 mb--182 mb behind last year. USDA ultimately expects US wheat exports to trail last season by only 140 mb (875 mb vs 1015 mb). For soft red winter wheat, it was another dismal week of exports--just .939 mb. By contrast, soybean export inspections were enormous at 73.787 mb. China took 57.36 mb of the total with Canada (3.427 mb), France (2.279 mb), Thailand (2.44 mb), Netherlands (2.072 mb), Japan (1.902 mb) & Mexico (1.18 mb) far smaller shippers. Cumulative soybean inspections now stand 108.6 mb above last year--far faster than the 42 mb increase USDA currently forecasts. Ironically, China's domination of the week's shipments may have spooked traders.
This afternoon's USDA Weekly Crop Progress report was fairly close to trade expectations. US corn harvest was estimated at 68% completed--up 14% for the week & within the 65-70% range of estimates. The previous slowest corn harvest in modern history is the 69% completion rate set in 1992. US soybean harvest was pegged at 94% done--close to trade expectations but 3% behind average. US winter wheat planting was estimated at 93% completed--4% behind the 2004-08 average pace. Among major soft red winter wheat states, Ohio is 99% planted--equal to its average. Illinois (89%), Indiana (90%), Missouri (61%) & Arkansas (77%) are far behind their average pace & much of that unplanted acreage will be "harvested" with prevented-planting insurance coverage--not a combine. USDA estimated Illinois corn harvest at 60% completed & bean harvest at 95% done. SW Illinois corn & bean harvest were both estimated at 90% finished.
Gulf basis values were wobbly today as more of the soybean harvest flowed to market. Locally, corn & wheat basis was a penny higher but bean basis was 3c lower.
Fall fertilizer & winter annual weed control applications can save valuable time next spring, & may save you money, too. Contact your local Top Ag Agronomy Center at Okawville, Trenton or Pierron for all your fertilizer & 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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