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Archived Market Commentaries:
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Date:
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12-7-09
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Headline:
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Closing Grain Comments
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Comments:
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Grains continued to follow the US dollar's lead--in reverse on Monday. When the greenback rallied during the overnight or day session, grains eroded. When the dollar slid, grains rallied. Today's good news was that the US dollar index failed to find follow-thru buying above last week's highs. Comments by Fed Reserve Chairman Bernanke that forecast a slow-to-recover US economy that would require an "extended period" of low interest rates gave dollar bears some leverage by mid-morning. As has often been the case recently, soybeans proved the most immune to price weakness today. Traders reacted positively to last week's over-the-top soybean export inspections of 58.284 mb--38.231 mb of which were headed to Mainland China. Because the Chinese currency is pegged to the US dollar & they are the dominant soybean buyer, changes in the dollar's value has had less impact on beans than on corn & wheat the past several days. Corn (25.92 mb) & wheat inspections (12.982 mb) were again near the low end of expectations, helping to stall recovery attempts after mid-morning. March corn futures settled with a low-range 4.75c loss. Jan soybeans closed with a mid-range 10c rebound. March CBOT wheat ended with a bottom-range 10c loss on Monday.
Weekend news was scarce. Kazakhstan reported they expect to sell to or ship thru China up to 3 mmt of grain in coming years, extending their markets to Pacific Rim nations. Israel is tendering this week for US corn products & soymeal. After the close, USDA reported that US corn harvest has reached 88% completed--about 2% below expectations. While that's up 9% for the week, only 1992 had recorded a slower corn harvest pace in the past 24 years by early December. USDA pegged Illinois corn harvest at 85% completed, but North Dakota (53%) & S Dakota (73%) are even slower. With blizzard conditions forecast on Tuesday from Nebraska (88% done) thru Iowa (94%), Missouri (92%) & into Wisconsin (77%), US corn harvest be extended well into December. USDA also reported that only 93% of the winter wheat crop had emerged. US wheat conditions were left at 63% good-excellent. The Illinois wheat rating declined 2% to 42% G-E. Late this afternoon, Australia lowered its wheat crop estimate to 21.99 mmt--down .73 mmt from its Sept estimate but 5% above last year's output. Unless the dollar runs higher, crop news should support prices on Tuesday. USDA will revise its supply-demand projections on Thursday.
Locally, basis levels were mixed on Monday. Corn basis softened a penny as wet corn continued to flow into marketing channels, & soybean basis weakened 5c as higher prices met with wavering export demand. But wheat basis gained 5c this afternoon. New crop soft red winter wheat acreage declines are the main support for the US wheat market right now.
Do you have non-GMO corn or soybeans or other specialty grain varieties that may be eligible for direct ship programs? Give Mike a call at the Okawville elevator at 243-5293 & let him know what varieties & quantities you have available. He'll keep you informed of what marketing programs develop.
"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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