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Archived Market Commentaries:
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Date:
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11-24-09
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Headline:
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Closing Grain Comments
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Comments:
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Weak export demand helped trigger more chart-based selling pressure in corn & wheat on Tuesday, but soybeans found support on solid demand expectations. Today's downward revision to July-Sept US gross domestic product (2.8%, -0.7%) made traders question whether feed & energy demand would rebound soon. With crude oil down sharply, corn came under pressure, too. Coming on the heels of Monday's downward reversals, trading funds cashed out more of their ownership & headed to the bank ahead of Thursday's Thanksgiving holiday & Monday's first notice day on Dec grain futures. By day's end, Dec corn broke thru 9-week uptrending support, & Dec CBOT wheat settled below 3-week trendline support. Jan beans traded on both sides of unchanged, but the strong outlook for bean & soy product exports surfaced buyers on breaks. Dec corn declined to a low-range 11.25c loss. Jan beans closed with a top-range 4c gain. Dec CBOT wheat crashed to a bottom-range 24.25c decline.
Today's corn losses came despite limited harvest progress & prospects for slow advancement in coming weeks. Monday's weekly crop data indicated 33% of the western Corn Belt corn crop & 35% of eastern Corn Belt corn remained in the field as of Sunday. Thursday's holiday, wet corn, & deteriorating weather will keep the last 20-25% of the 2009 corn crop still in the field on Dec 1--the worst harvest pace in 30 years. Although markets factored in yield losses in the November rally, the poor start to the corn export season has many wondering if demand is as robust as USDA foresees.
USDA's ag attaché estimated China has harvested smaller corn & wheat crops & has boosted its swine herd by 4% in 2009. Greater feed demand is expected, but large Chinese corn & wheat stocks are seen limiting grain imports. Trade sources say Chinese buyers are still shopping for Feb-March soybeans from the US, but that demand is soon headed to South America. Brazil has now planted 74% of its bean crop--7% ahead of last season's pace. Both Brazil & Argentina remain on track to produce record-sized soybean crops this year.
Weaker pre-holiday demand at the Gulf sent basis levels tumbling Tuesday. Locally, corn basis dropped 7c, bean basis lost 5c, but wheat basis jumped 3c.
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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