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Archived Market Commentaries:
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Date:
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Jan. 11, 2010
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Headline:
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Closing Grain Comments
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Comments:
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After having traded higher on Chinese economic reports & a weaker US dollar overnight, corn & soybeans spent much of Monday's session grinding sideways below Friday's closing prices. Positioning for Tuesday's USDA crop production, grain stocks, supply/demand, & winter wheat planting reports took center stage during today's session as traders built in expectations for smaller corn output & larger soybean production. Wheat maintained a two-sided price range for much of the day, bolstered by expectation for smaller wheat acreage. The end of today's trading was volatile. After setting new intra-day lows, corn pushed back up towards its opening range in the final trading minute. Wheat probed a two-hour low & then rushed to a new-intraday high in that same final minute. Soybeans came off its session lows in the last 3 minutes as corn & wheat rallied. March corn futures edged 1/2c lower, March soybeans dropped 11.5c, & March CBOT wheat settled 4c higher on Monday.
USDA's Weekly Grain Export Inspections were again weak for corn (20.579 mb vs 22-32 mb expected) & wheat (11.035 mb vs 10-18 mb foreseen), but solid for soybeans (41.021 mb vs 40-45 mb guessed). Only 194,000 bushels of US soft red winter wheat were inspected for export last week, continuing the dismal SRW wheat export trend. The feeble numbers for corn & wheat helped to extend their early losses after the 10 am report's release. Price-wise, huge South American soybean production prospects have overwhelmed record-high soybean demand in the past month. Soybeans posted their fourth straight daily loss despite the firm export news. As in past weeks, China was again the dominant destination for US soybeans, taking 27.746 mb--more than ten times more than the next largest customer. Chinese Customs data indicated last night that China had imported a record-large 4.78 mmt of mostly US soybeans in December.
Looking ahead to Tuesday's 7:30 am reports, analysts expect USDA to lower corn production by 102 mb to 12,819 mb. With about 500 mb of unharvested corn still in the field, USDA's production report, its Dec 1st grain stocks in all positions estimate, & its feed/residual corn usage forecasts particularly uncertain. Soybean output is seen rising 22 mb to a record-high 3,319 mb. Traders assume that US producers harvested soybeans at the expense of corn acreage during November. Analysts foresee 2009-10 corn carryover declining 62 mb to 1,613 mb as lower production is partially offset by reduced exports & feed use. Bean carryover is expected to decline 18 mb to 237 mb as export & crush use expands by 40 mb. Wheat stocks are seen rising 5 mb to 905 mb--a 10-year high--due to poor exports. Winter wheat acreage is guessed at 40.916 mil.ac.--2.395 million below last year's sowings. Soft red winter wheat acreage is forecast at 6.975 million--down 1.334 mil.ac from last year. We look for USDA to report the smallest Illinois wheat acres since 1866.
Locally, corn & soybean basis were steady this afternoon, but wheat basis jumped 11c. Temps for the last half of January look to be considerably warmer than the first ten days of the month, allowing Illinois River grain to provide more competition to St Louis grain origination.
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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