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Archived Market Commentaries:
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Date:
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12-10-09
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Headline:
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Closing Grain Comments
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Comments:
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Although USDA's December Supply/Demand reports were slightly negative this morning, traders instead focused on the standing corn which is now being stored in snow drifts. Grain futures opened steady to 2c weaker this morning, but corn quickly came roaring higher as speculators bought corn in spread-related trading. Today's corn & wheat gains amid small soybean losses looked like further unwinding of previous long bean/short corn & wheat spreads set on last week's bean rally. Outside market influences were mixed today as the US dollar index & crude oil traded little changed. March corn futures closed 9.5c higher, Jan beans settled down 1.5c, & March CBOT wheat ended up 1.75c
In today's S/D reports, USDA cut corn exports by 50 mb & increased projected carryover the same to 1,675 mb. If the export pace hasn't improved by January, look for further reductions. In its world coarse grain report, USDA decreased both output & usage. At 176.52 mmt, world coarse grain stocks would be down 6.5% from last year & require good crops again in 2010. Average US corn farm price range was left at $3.55. For soybeans, USDA increased exports & decreased carryover by 15 mb to 255 mb. Soybean crush & soy product exports were left unchanged. USDA also kept its soybean production forecasts for Brazil (63 mmt) & Argentine (53 mmt) unchanged, but increased Chinese demand slightly. Projected world soybean ending stocks were lowered by .3 mmt to 57.09 mmt--34.6% above last year. The average US soybean farm price estimate was bumped 30c higher to $9.50. US wheat food usage was lowered by 15 mb & wheat carryover was increased the same to 900 mb--the highest since 2000. Soft red winter wheat domestic & export usage were each lowered by 5 mb, & carryover increased 10 mb to a burdensome 177 mb. USDA also increased world wheat output, decreased usage, & boosted world wheat ending stocks by 2.63 mmt to 190.91 mmt--29.5% of usage. World wheat stocks & the stocks-to-usage ratio would be the highest since 2002. Average US wheat price was left at $4.85.
Weekly Export Sales were very strong for soymeal (297,200 mt), near the upper end of guesses for corn (33.372 mb) & soybeans (29.295 mb), & at low end of forecasts for wheat (9.009 mb) & soyoil (12,400 mt). Corn & wheat export sales remain disappointing, but soybean & soy product sales are the strongest ever.
Harvest resumed in southern Illinois today, but will stay halted for a while in areas that had a foot of snow & 50 mph winds on Wednesday. Locally, basis improved 2c on corn, 4.5c on beans & 3c on wheat this afternoon as barge costs continued to drift lower & Gulf basis bids firmed on reduced farmer sales.
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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