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Archived Market Commentaries:
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Date:
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11-30-09
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Headline:
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Closing Grain Comments
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Comments:
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Outside markets & money again ruled today. The US dollar worked lower on Sunday night after the United Arab Emirates central bank said it would guarantee liquidity to its city-state member Dubai's government. That allayed fears of a default on Dubai corporate debt & traders sold the dollar & bought commodities. Let's call it the "Mutual Fund Monday Effect." For the month of November, there were 5 Mondays. Although Dec corn futures rose 20.5c for the month, it gained a net of 46.75c on Mondays. Jan soybean futures gained 84c in November with 65c of that rally on Mondays. Dec CBOT wheat rallied 73.25c during the month, but gained a net $1.0675 on Mondays! What's the deal? New money is getting committed at the beginning of the week. There's no doubt the speculators are back! This afternoon's CFTC Trader Commitment combined futures/options data showed index funds owned their largest net long position in soybeans since 7/08/08, their largest net long in CBOT wheat since 7/15/08, their largest net long in Kansas City wheat ever, & their largest net long in live cattle since 10/7/08. Monday, Dec corn gained 5.5c, Jan beans rallied 7.5c, & Dec CBOT wheat rebounded 18.75c. For Tuesday-Wednesday, price action will key on whether funds commit more money to start the new month.
Traders ignored bearish news of favorable US harvest weather, good crop growth weather in South America, & a sub-par weekly export inspections report today. The western Corn Belt looks to have dry conditions to advance corn harvest for the next 7-8 days. Most South American crop regions received rain over the past weekend, & mostly mild temps are expected ahead of the next rain system that's due there by early next week. Corn export inspections were miserable at just 23.751 mb--below the trade's feeble 27-34 mb expectations. Although USDA forecasts a net 242 mb increase in 2009-10 corn shipments, first quarter corn inspections trailed 2008 by 6.1 mb! Wheat inspections of 14.674 mb--including 1.005 mb of soft red winter wheat--were at the low end of 14-19 mb guesses. Soybean inspections reached 41.268 mb, but that was below forecasts that ranged 50-71 mb. China took 24.766 mb of beans last week with Taiwan (4.373 mb), Netherlands (2.392 mb), France (2.329 mb), S Korea (2.122 mb), Japan (1.867 mb) & Canada (1.664 mb) accounting for most of the balance.
This afternoon's USDA Weekly Crop Progress report indicated US corn harvest advanced 11% last week to 79% completed & US bean harvest rose 2% to 96% done. US wheat advanced 3% to 96% planted--2% behind the 2004-08 average. The wheat crop was said 89% emerged--4% behind the 5-year pace. Although no more corn or bean ratings will be issued this season, USDA's 18-state wheat condition rating edged 1% lower to 63% good-excellent. Illinois corn harvest advanced 12% to 72% done, the state's bean harvest edged 1% higher to 96% completed, & 89% of the Illinois wheat crop has reportedly been sowed. In SW Illinois, USDA estimated corn was now 94% combined & beans were 92% harvested.
Locally, corn basis dropped 4.5c & wheat basis declined a penny this afternoon as Gulf buyers backed away from the CBOT rally. Bean basis rallied 2.5c today as harvest is all but finished except in the South. St Louis will soon see a big seasonal advantage versus mid-Mississippi & Illinois River shippers. With no locks from St Louis to New Orleans, our region will retain its basis advantage until the upper Mississippi reopens in March.
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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