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Archived Market Commentaries:
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Date:
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Jan. 8, 2010
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Headline:
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Closing Grain Comments
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Comments:
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A late session burst of buying lifted corn & wheat futures solidly higher & soybeans well above mid-session lows on Friday. The pattern of opening strength, sideways/lower trends during the bulk of the trading day, & end-day recovery marked much of this week's activity. Since many trading funds tend to be buyers on the open & the close, today's gains in the absence of any strong fundamental news made most analysts assume that speculative index fund buyers were rushing into the market. Friday, March corn futures settled with a top-range 5.5c gain. March soybeans closed with a mid-range 4c loss. March CBOT wheat ended with a top-range 10.75c rally. For the week, March corn settled 8.5c higher, pushing weekly corn charts to their highest close since June 12th. Weekly soybean charts dropped 26.75c lower for the week. March CBOT wheat pushed 27c higher for the week despite generally bearish news.
Index fund rebalancing was due to begin today & last for the next 5 trading sessions. CBOT data shows total open interest in corn & wheat has expanded 10.8% & 6.3%, respectively since mid-December. CFTC Commitments of Traders reports show that speculative managed money that bets on price direction has been the big grain buyer recently--not index funds. Elevators hedging their purchases from farmers have been the main net sellers during that time. If USDA data on Tuesday is bearish, will the directional specs bail out of longs?
Export news was limited today. Taiwan feed mills passed on 2.362 mb of US or Brazilian corn offers due to high prices. China’s Commerce Ministry raised its December soybean import estimate to a record-high 5.25 mmt (+.67 mmt) & also boosted its Jan soy import forecast to 3.3 mmt (+.67 mmt). Most of those soy receipts will come from the US. Traders viewed as bearish a survey of Chinese soybean buyers that indicated they have completed their purchases of US beans & would turn to South America for March-May needs. China has bought 725.9 mb of 2009-10 US soybeans--up 287.7 mb versus Dec 31, 2008 commitments. The rest of the world has increased US bean purchases by 97.8 mb so far this season.
Locally, corn basis was a penny higher, bean basis improved 2c, but wheat basis declined 5c Friday. CBOT trends, the frozen Illinois River & the switch from Dec to Jan bids combined to push cash corn prices 40c higher, spot bean prices down 4c, & spot wheat prices up 27c this week.
Would you like CBOT futures prices reported to your phone? Top Ag can send you nearby & harvest futures prices for corn, soybeans & wheat at 9:45 am, 11:15 am & 1:45 pm each day. We provide the service for free, but you may have to pay for text messages--depending upon your phone plan. Give Scott, Mike or Seth a call at the Okawville elevator at 243-5293 & we'll get you set up!
"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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