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Archived Market Commentaries:
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Date:
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Jan. 14, 2010
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Headline:
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Closing Grain Comments
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Comments:
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Grains continued to falter on Thursday as speculators who had aligned wrongly for bullish USDA reports continued to exit their positions. Corn, soybeans, soymeal & wheat stayed above Wednesday's lows--supported by index fund rebalancing & end-user pricing. But they also remained below yesterday's highs--limited by ongoing speculative liquidation after USDA's large world grain supply forecasts. Solid soybean demand news wasn't enough to offset big South American prospects, & disappointing export data for corn & wheat limited rally attempts, too. March corn futures settled with an upper range 3c loss, March soybeans closed with a mid-range 8c loss, & March CBOT wheat ended with a low-range 9.25c loss. With most of the early January index fund buying now completed, Friday will provide a big test of underlying speculative demand.
Monthly soybean crush & weekly soy exports reports were very strong this morning, but weekly corn & wheat exports again proved sluggish. The National Oilseed Processors Assn. reported its members' crushed a record-high 164.377 mb of soybeans in December--about 3.3 mb above analyst estimates. Soy product export demand & stable US poultry & hog numbers allowed December crush to exceed the previous all-time high pace set in November. In this morning's USDA Weekly Export Sales data, sales of soybeans (25.584 mb vs 22.0-31.2 mb expected), soymeal (357,000 mt vs 75,000-200,000 mt) & soyoil (49,900 mt vs 5,000-10,000 mt) continued at an unsustainable, record-large pace. Traders mostly shrugged off the report, assuming that soybean & soy product export sales will tail off dramatically later this year. By contrast, last week's corn export sales were just 12.885 mb--at the low end of expectations that ranged 9.8-27.6 mb. S Korea reportedly bought up to 9 cargoes of US corn today for March-June shipment, helping moderate the dismal weekly number. Traders will look for confirmation of those purchases by USDA on Friday morning. Sales of wheat were again awful last week--6.684 mb vs 5.5-11.0 mb expected--with only 96,000 bushels of soft red winter wheat sold for export. To reach USDA export estimates, weekly bean sales need to average only 4.9 mb, well below the 30.6 mb sold weekly since Sept 3rd. Corn sales need to average 31.1 mb (vs 27.0 sold weekly since early Sept) & wheat sales need to reach 11.3 mb/week (vs 9.9 mb since Oct 26) thru the rest of the marketing year.
Locally, corn basis jumped 5c higher, bean basis was steady, & wheat basis improved 3c today. Ice dams along the Illinois River are still hampering barge traffic there. It will take a week or more for conditions to improve.
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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