Thursday December 31st, 2009

Good evening everyone. Due to the holiday schedule the Energy Thursday reports have been thin. Therefore I will give a little catch up starting with today, crude oil touched the $80 mark, but closed relatively flat at $79.36. Last time I was typing we were in the low $70's holding out for the low $65 mark, but things have ramped up as inventories have shrunk and trade has been thin. It was draws across the board in this weeks DOE report, 1.5 million on crude oil, 300,000 on gas, and 2 million on diesel. U.S. crude stocks fell last week as refiners increased runs, overcoming the increased crude imports. Gas and diesel had draw downs amidst the cold weather and holiday travel. Nothing shocking as expectation were met, but one thing to consider is refinery runs remain 7% percent blow normal for this time of year, while inventories are still considered high, stocks keep chipping away towards average. Oil rose 14% in the past two weeks. As Les Klukas of Country Hedging will explain in the attached video this is some what expected in the short term as the year closes; but wait to lock in your spring gallons until the market provides its next dip. The dip is predicted in the coming month or so. Time will tell what happens in energy, but for now inventories still remain high, demand is still down from last year on diesel(which wasn't exactly a banner year), and the economy is still looking for direction. A new year is upon us and expectations of some early buying opportunities are anticipated.
Thanks for reading over the past few months, hopefully I have been able to convey some useful energy information. Comments or questions are welcome, thanks again.
Happy new year to all and to all ....
Zach

Wednesday, December 30, 2009

Corn and beans closed moderately weaker today in a thin pre-holiday trade. There was some excitement today as shortly after the open corn futures plunged to as much as $.17 lower after 1,000+ contract sell order hit the market and pushed right through buy orders. The market was able to rally impressively and even traded higher for a time before selling came back into the market near the close. News is pretty scarce these days, the Argentine grain exchange did increase their estimate for the Argentine corn crop to 15.8 million ton vs. USDA at 14.0 and 12.6 last year. Producer end of the year selling remains active as concerns about storability continue to pressure nearby corn basis levels as well as the need for end of year income needs. The next major fundamental event for corn looks to be the January 12 USDA report, in the meantime I am sure we will have plenty of first of the year fund type discussion to move prices one way or the other.

A choppy soybean session today with influence from the volatile corn market but prices ended $.02 lower. There was hope for higher trade today as USDA announced a 348,000 ton soybeans sale to China but this kind of news is apparently old hat, apparently keeping this from helping the market much today. Either way we would still expect that USDA will have to increase the export estimate for the year possibly pushing carryout near 200 mbu.

Phil

Tuesday December 29th, 2009

The last blog of the decade for myself, I hope all of you had a wonderful Christmas celebration. This week is usually a week known for very little or extreme price action as the volume of trades is always light and prices can move a lot with a big order or not move at all with no orders. For the week I would put this week in the extreme price category with soybeans up 39 cents and corn up 8 cents in the first 2 days. Fundamentally, traders are talking about a superb South American corn and soybean crop shaping up but concerns over the final production numbers of our crop. Traders are trying to estimate how many actual bushels of corn will be lost due to what's out there and how bad the latest snow storm was. Numbers I have seen thrown out are between 200-250 million bushels lost. If so, and keeping everything else equal, our carryout for this next year would drop from 1.6 billion to 1.3-1.4 billion. Funds are estimated long 222,000 contracts of corn, 97,000 contracts of beans and short 22,000 contracts of Chicago Wheat.

Basis levels on corn reflect the poor demand nearby and the urgency to move this below average quality crop sooner rather than later. Please make sure to check bins as we have heard of centers getting warm even in this cold weather. Soybean basis has bounced back nicely to reflect the huge nearby export demand, which has forced processors to also keep pushing for stocks.

Happy New Year!!

Scott Meyer

Monday December 28th, 2009

Harsh winter weather, outside market support and technical strength pushed Chicago Board of Trade corn futures higher Monday. The market was higher all day, trading within a tight five-cent range, and was led by wheat and soybeans, which both surged. Strength in wheat and soybeans was attributed to short-covering and technical buying, which were factors in corn as well. The nearby March corn contract has climbed above key major moving averages, and a couple of analysts said the market appeared to be on the verge of a breakout to the upside. The market also had support Monday from the heavy snow that hit the U.S. Midwest over the weekend, which slowed grain movement, strengthened basis and heightened concern about the more than 500 million bushels of corn still in the field. The unharvested corn represents at least one-third of the projected 2009-10 U.S. carryout, analysts said.

Soybean futures finished sharply higher Monday after rallying in late dealings amid technical buying. There were ideas the market was due for a bounce after recent losses. As of Thursday's close, January soybeans had lost 61 cents for the month. Soybeans finished firmer with neighboring corn and wheat. Weakness in the dollar and gains in crude oil were supportive to agricultural markets, a trader said. Weekly U.S. soybean export inspections of 51.9 million bushels also were considered strong. Demand remains supportive for the market. Traders are waiting for the U.S.D.A. to issue its next crop report Jan. 12. They may put some risk premium back into the market amid uncertainty about the size of the U.S. crop after a late harvest.

~Chris Spurlock

Tuesday December 22nd, 2009

With the blizzard in Washington D.C. over the weekend, harvest progress as of Sunday was delayed until today, below is a chart with estimates by the USDA of what acres are left in the field:

Colorado 19,000
Illinois 590,000
Indiana 109,000
Iowa 267,000
Kansas 77,000
Michigan 119,000
Nebraska 623,000
North Dakota 560,000
Ohio 31,000
Pennsylvania 62,000
South Dakota 552,000
Wisconsin 348,000

Total Acres 3,912,000 or 621,000,000 bushels!

Grain markets are being played around by technical traders as volume remains very light with moving averages being looked at to either find support or provide further fuel to selling opportunities. South America weather continues to be great which is pressuring soybeans as of late. I would like to wish everyone out there a Very Merry Christmas!

Scott Meyer

Monday, December 21, 2009

The season of low volume is upon us with two holiday shortened weeks to end the year. The corn market seemed to have some pretty good support for a while today with commodity fund orders pushing the market up $.07 at one time today. Once the round of buying was done however the market slowly gave up the gains before closing up $.02 for the day. The snowstorm that impacted the East coast closed all government offices today so the export inspections report and the crop progress reports have been delayed until Tuesday.

The soybean market spent most of the day weaker as weather in South America appears ideal and there are concerns that the a key Bio-diesel $1.00 per gallon tax credit will expire December 31 without renewal. Needless to say the credit in some form is needed for that particular industry to compete. Most traders expect it to either be extended or renewed after the first of the year with retroactive credits but there is concern nonetheless. The recent acres estimates by Informa for next year bean production have been a negative influence on beans in the past several days as it indicates a growth in acres that coupled with good growing conditions in South America could indicate that equilibrium prices for soybeans could start with a 9 instead of a 10.... There seems to be macro-economic influences that continue to support soybeans however so the ability to predict price direction from here continues to be difficult at best.

Phil Farrell

Thursday December 17th, 2009

Good evening blog readers. The energy market closed relatively unchanged today, but has seen a bit of change since yesterdays DOE report; 2.5% up from Tuesdays close. The story has been the dollar and with its recent streght it has put a hold on what was a very bullish energy market. The bulls came out on Wednesday after the DOE reported draws of 3.7 million bpd on crude. Diesel had draws of 2.9 million bpd and was the main reason for a single day jump of .06 cents. Four week demand is still down about 6.5% on diesel and up about a 1% on gas. Refinery utilization is up about a 1% to hit right at 80% total. We are at an interesting intersection now, does crude still follow the dollar or will we get seperation? After todays trade it appears the dollar is still king, but time will tell. Experts still call for down side in crude with a key nubmer being $67.50, today it closed at $72.65. Look for some profit taking tomorrow as the week closes.
Thanks for reading.
Zach

Monday December 14th, 2009

USDA released their weekly crop progress tonight, pegging US corn harvest at 92% complete vs. last week harvest of 88%. Traders were expecting the harvest to be between 90 to 94% complete. Current estimates show northern Illinois at 87% completed, with western Illinois being furthest behind at 78% complete. Grain prices rose on the Chicago Board of Trade after a bullish research note from Deutsche Bank said agriculture futures are poised to rise sharply in the coming months.

Investors waded back into most other commodities as the dollar weakened, making them less expensive for foreign buyers. A nine-month rally in commodities came to a halt this month as investors book some profits and question how long the dollar will remain weak. The Federal Reserve has kept interest rates near zero this year, weakening the dollar and making assets like stocks and commodities more attractive to investors. As the economy shows signs of strength, investors are worried that the Federal Reserve may raise interest rates sooner than expected and potentially upend the rally in commodities.

The Fed meets this week for its final policy meeting of the year. The central bank is widely expected to leave rates unchanged, but investors are anxious for any more insight on the timing of a future rate hike.

~Chris Spurlock

Thursday, December 10th, 2009

Its has been a week since we last discussed Energy and it hasn't been pretty for those looking to make a buck on crude. Today recorded the 7th straight day of losses. While today's losses where mild at only .13 cents, the past week has cost the crude market about six dollars. This weeks DOE report showed large draws on crude at 3.8 million bpd, but sizable builds in gas of 2.2 million and 1.6 million on heating oil, which held the bulls at bay. The market has taken a dip and when that happens it tends to create a crossroads of such. The 100 day moving average on crude is about to cross the seven day moving average, which doesn't mean a hill of beans to end users like us, but to the technical investment folks it could mean one of two things:
1. Buy and create an end of year run back up to the $80 mark or 2. Sell, take profits and hold out for $60 to get back in. Time will tell which direction we head, but watch for the dollar to be the catalyst which sparks the move. It was relatively unchanged today, but a bounce could make option 2 look very tempting. As I mentioned last week it appears the market is going to make a move over the next month, so far it is still in its $10 range of 70-80 but it has given away all it cushion.
Product
Diesel
Over all demand is still down about 8% from this time last year and nothing seems to be changing anytime soon. The nationwide cold snap will draw on gallons, but over the road hauling and manufacturing are still down.
Gasoline
Over all demand is up 1.2% from last year over a four week average. This weeks DOE report showed builds of 2.2 million bpd on gas, helping confirm the past weeks dip in price. Refinery runs are up about 1.4%, so they are making more product as the year comes to a close, something about drawdowns on crude for tax purposes. It is safe to say this weeks losses of a dime provide a good buying opportunity, not say there still isn't downside potential.

Stay warm
Zach Winter

Wednesday December 9th, 2009

Both corn and soybeans finished lower today. Corn saw position squaring ahead of the USDA report due out tomorrow. While this report will not have any updates to production numbers, which is due out in the January report, traders are expecting an increase in ending stocks. Lower crude oil and a higher US Dollar also put pressure on the corn market as well. Weather continues to impact the final leg of harvest of throughout several key states, which is providing modest support to the corn market. With 12% of the US corn acreage remaining to be harvested, along with 1.5 billion bushels in temporary storage throughout the US, one has to wonder if Ag fundamentals will start to play a roll in the direction of the corn market.

Chris Spurlock

Tuesday December 8th

Corn up 1.25 cents, Soybeans dn 9.0, and wheat dn 8.25 today amid lower outside markets. The ugly weather was mentioned as support for the corn market today as analysts try to figure out what is left and what will be harvested. One company I read estimated:

Illinois 309 million bu
Iowa 146
Kansas 33
Minnesota 158
Missouri 35
Wisconsin 97
South Dakota 186
Total snow covered bu of 964 million after today/tonight

Usda supply/demand report out 7:30 Thursday morning with many looking for slightly lower demand on corn but nothing changed yet on corn or soybean production.

Bundle up tomorrow as the 2009 winter makes it's first impression on all of us.

Scott Meyer

Friday, December 4, 2009

The corn market today was sharply lower as most commodity markets were lower led by a $50.00 sell off in gold futures. Recent comments from Ben Bernanke of the Federal Reserve have given the US dollar a short term boost and commodities some short term pressure. The dollar index rose 120 points today breaking out from a long sell off after Ben Bernanke said he would not rule out raising interest rates to prevent asset bubbles. The weaker dollar we have been seeing has been partially attributed to low interest rates and has supported commodities in general. A factor in the market today was also a unemployment report today showing an unexpected .2% drop in unemployment to 10%. For the week corn was down $.30 with the lower market bringing out talk of poor export and feed demand. There will be a USDA Supply and Demand update Thursday December 10Th where traders will look for updated usage numbers to verify these feelings. Weather forecasts suggest favorable conditions for corn harvest activity over the weekend with winter storms expected for the Midwest the middle of next week.

Soybeans traded lower on a firm US$ and weaker crude oil and gold markets. The USDA did announce the sale of 232,000 tonnes US soybeans to China for 2009/10 marketing year, probably helping beans only lose $.04 for the day. For the week beans were down $.17 but that was after setting new highs for the move the past Monday at $10.78 in the January contract.

Phil Farrell

Thursday December 3rd, 2009

Well I hope everyone had a good Thanksgiving, seeing as I took the day off we are a week short on energy news. Not to worry little has has occurred in the last two weeks; we still remain in the sideways trend which has lingered for months. Its a match of tug of war between the bulls and bears each week, but by weeks end we finish about where the market started.
Crude closed .14 cents lower today at $76.46. Diesel was up a penny and gas closed unchanged. A rather uneventful day in energy, after yesterdays losses. Wednesdays DOE report was another reminder of dismal demand with builds in crude of 2 million bpd and builds in gas of 4 million. Diesel surprisingly showed draws of 1.2 million bpd, but overall weekly demand was still down. Refinery utilization was down .6%, keeping it under the 80% mark at 79.7%. The bearish news of yesterdays report gave back early week gains to render the week a stalemate.
The short term outlook is based on the old greenback. If we see any significant gains as the year comes to a close look for some of the long term crude portfolio folks to claim profits. This is my anticipation, as there annual reviews are based on profitability and profits can not be claimed unless the dice have been picked up and the chips cashed out. Stay tuned, I think the coming weeks will be interesting as the oil pyramid takes shape for 2010.

Tuesday December 1st, 2009

I hate to harp on outside influences but they seem to be all that is talked about lately. Gold again made a charge higher to settle just below $1200 ounce. The US Dollar was again much weaker today which led to the higher gold. Soybeans were again the leader in the Ag complex up as much as 17-18 cents before failing at the end to close 1 cent lower. Corn managed slight gains throughout the day before following soybeans and ended down 3 cents. The weak closes in the corn and soybean markets were very disappointing considering the higher outside markets. Argentina's main crop estimating firm put the Argentine soy crop at 52 mmt vs USDA at 53 mmt, but it is still much larger than the 32 mmt of production last year.

Crop Progress reported Monday night for nation:

Corn harvested 79% tw, 68% lw, 94% ly and 97% avg
Bean Harvest 96% tw, 94% lw, 98% ly and 98% avg

Illinois corn at 72% tw, 60% lw, and 99% avg
Illinois beans at 96% tw, 95% lw, and 100% avg

On a side note the first 2 days of November saw huge inflows of fund money and corn shot up 40 cents/bushel, it was a rough start to the December month today with money flowing in early and sending new crop corn to levels not seen since June before failing.

Scott Meyer

Friday November 27th, 2009

A volatile session that saw a 20 cent trading range with corn shaking off a sharply lower overnight market. Overnight commodity markets were sharply lower on concerns about financial concerns in Dubai which in turn rallied the US dollar. As today’s session wore on there was a calm that returned to the stock and currency markets. The US dollar index gave up over 300 points of its 500 point rally from last night which in turn caused traders that sold commodities overnight and early this morning to cover in their shorts.

Spot gold tumbled more than 2 percent on Friday after hitting an all-time high near $1,195 an ounce the previous day, as the dollar bounced from 15-month lows against major currencies and worries about debt problems in Dubai prompted investors to trim their positions. The Dubai worries also pushed Asian equities and commodities
lower across the board.

Have a good Holiday Weekend
Chris Spurlock

Wednesday, November 25, 2009

Happy Thanksgiving! Our offices and elevators will be closed for Thanksgiving and will re-open Friday morning at 7:00 am.

Corn futures were firm overnight and this strength carried on throughout the day session. The corn market was able to snap a six day losing streak, as oversold condition and trend line support worked in concert with the lower dollar to boost prices. The US dollar index broke below recent lows to close at the lowest level since August of 2008, this action helped lead to another record high for Gold futures as they approach the $1,200 level.

Soybeans traded on both sides of unchanged, and the market did find support at $10.32-10.35 area for the second day in a row. It was strange to see beans struggle while corn and wheat were the upside leaders today but that may be attributed to traders taking profits on the long soybean-short corn trades that have been profitable so far this month. Volume was light in pre-holiday trade and sharp early losses were quickly erased. Volume overall was very light, leading to a choppy trade that had a hard time figuring out which direction to go.

Phil Farrell

Tuesday November 24th, 2009

A mixed bag for the grain markets today as corn and wheat were down hard on fund selling and weak fundamentals, while soybeans ended slightly higher on light fund buying and strong demand fundamentals.

Corn closed down 11 cents with Dec 09 at $3.76. Funds were estimated sellers of 9,000 contracts as a slightly stronger US Dollar and profit taking dominated the scene. With the upcoming holiday, traders looked to clean up positions for end of the month reports as many view Monday Nov 30th as the first of December. Harvest progress looks to be hampered over the next 2-3 days by wet weather, although total precip amounts don't look to be that great. A reminder to those producers with December basis contracts or December Hedge To Arrives, both contracts will need to be priced or rolled to the Mar 2010 futures month by Monday.

Soybeans managed to buck the trend set by virtually every other commodity and finish 4 cents higher today with Jan 2010 at $10.46. Soybean support continues to stem from an impressive export demand and domestic crush margins. With harvest basically wrapped up and the shortened holiday trading schedule, traders look for choppy sideways trade into the end of the week.

Scott Meyer

Steward Announcement

A note for all of our customers:

On Wednesday November 25th our elevator in Steward will be joining our local area farmers in supporting a harvest event for the Govig family. Members of the community have come together to harvest the families crop in one day. Elburn Cooperative will be cooperating to be sure we get this volume of corn dumped in a timely manner. Please be aware we will be placing a priority on getting this corn elevated in our facility.

Friday, November 20, 2009

The corn market seemd to suffer from a lack of interest today. There was pressure from a firm dollar index which actually closer higher for the week for the first time in three weeks. The weak export sales report from yesterday didn't help matters despite the announcement today of a 480,000 ton sale of corn to Mexico for 2009/10 and 275,000 tons for next year. The expected clear weather for the next several days should allow for a good harvest window heading into the Thanksgiving window. We all seem to be waiting for the shoe to drop on the fundamental side with U.S. corn currently overpriced compared to competitors and livestock profitability continuing weak.

The bean market doesn't seem to care about the problems of the corn market, export sales are up 59% for the year, soybean meal sales are up 68% with Chinese demand continuing brisk so far this year. For the day commodity funds were good buyers of beans at 4,000 contracts helping to push beans up $.60 for the week with the January contract now at the highest level since August. Good prices? We certainly have seen a lot of interest near the $10.00 from local producers.

Phil Farrell

November 19th, 2009

It is energy Thursday, not much has been said about grain lately on our "grain blog" so I thought I would let Clint Vaughan our WSPY radio correspondent let you know whats happening. Of course after I get done boring you with Energy updates.
Once again the story this week has been the dollar. With the dollar heading higher traders looked for a safer place than commodities to invest their money. Several recent articles have pointed to the real life situation our economy is in, not the one made up of paper day traders wearing white collars and expensive shoes, but the one with increasing monthly home foreclosures and delinquent payments. This weeks talks are pointing to the mortgage mess not being behind us, which could be a catalyst that moves fuel prices back down in the long term. This weeks DOE report should of sent the market up, but with the dollar gaining and uncertainty in the air, it has been pretty much a stalemate. Early week gains have balanced after two consecutive day's of loss. It was draws across the board on crude and product, in this weeks DOE report. If I would of wrote the blog yesterday, I would of been much more concerned about market gains, but as the dollar has gained the investors have shied. Prices seem to be stable and I don't look for much change as we close the week, a possibility of small gains in tomorrows forecast. Overall weekly demand is up on gasoline by 8.8 million bpd and up on diesel 3.5 million bpd. Four week average demand verse last year is still down on both products; .4% on gas and 11.4% on diesel. In the short term I don't see prices moving much out of the current range, no quick reason other than personal demand to fill up.
And now Clint Vaughan...
"Wednesday, the market showed rallies in both corn and beans; however, these rallies didn’t hold their strength on the close as the board ended lower. Today we saw a repeat on soybeans as they rallied again, although they did not end on their daily highs the board did close higher. The basis has also narrowed on both corn and beans, which has helped to push beans up and over $10.00 mark. The narrowing basis has also helped to hold corn steady to early week closes. Overall, not a bad week for grain."
Signing off
Zach

Thursday November 12th, 2009

Good evening readers. Its Energy Thursday. It is becoming a theme,Energy losses, it seems the past couple of weeks my story reads the same. Three days of gains on the Energy market followed by a bearish DOE report, which gives all the gains back. It is what they call a sideways trend, with subtle twists. The twist is, every so often the gains or losses are too great or too little and we begin a new sideways trend. Today was our weekly reminder demand is down. The DOE report was released today due to the Veterans Day Holiday, and it caused a free fall. Crude dropped $2.34, gas and diesel both fell by .05 cents plus. DOE figures showed builds on crude at 1.8 million bpd, with refinery utilization down .7 percent, dropping overall refinery capacity to 79.9 percent. Gasoline had monster builds of 2.5 million bbl's; expectation were for inventories to remain unchanged. Diesel had builds of 300,000 bbl's, which early week analysts predictions were draws of 300,000 bbls. Demand figures continued to disappointed with gas down 1% on a four week average from last year. Diesel demand was down 13.8% from last year, both indicators of the economy still lagging. My short term outlook is somewhat neutral. Combined today's dollar gains and the DOE report information and losses don't seem as bad as they could of been. As with most things, memory is short term so look to see a flat day tomorrow with potential for small gains. It seems that the DOE report data affects or is it effects, the market for about a day and then its back to the dollar. "It's all about the dollar these days", my grandfather told me this twenty years ago, I just didn't know what he meant.
Signing OFF
Zach

Wednesday, November 11, 2009

Was today a glass half full or half empty for the corn market? The bulls will point to new highs being made again today, while the bear will point to a close that was near session lows. Today there was fund buying to drive the market higher early on in the session but then as the dollar rallied values dropped off to trader lower before a recovery to unchanged, quite interesting really with the market selling off $.12 from the highs, rallying back to challenge them before closing unchanged. Producer selling today picked up for both old and new crop as producers sell near 6 month highs into the continued fund buying. Will the buying continue? or will producers in areas experiencing good yields get their selling shoes on?

The Soybean market put in a mixed day today as a ramifications of the November USDA crop report is still being absorbed by the market as larger US crop and a So. Hem crop that is 27 MMT larger than last year would seem to be a detrimental to higher prices. The US $ traded mostly firmer but fund buying, stronger crude oil, and stronger precious metals trumped the bearish USDA news allowing soybeans to finish the day firmer. Good harvest weather is currently forecast for most of the belt which should allow for soybean harvest progress to get largely wrapped up.

Phil Farrell

Tuesday November 10th, 2009

USDA Report out this morning

Corn yield lowered from 164.2 in October to 162.9 with reports of 4.0% lower average ear weights in IL. The corn carryout for next year was lowered 50 mbu but still stands at 1.625 billion. Interesting to also see world corn supplies decreasing next year as well but only minimally. Corn started out on the defensive but managed to end up 8 cents today after a fury of technical fund buying late in the session. JP Morgan and Goldman Sacs released wires today touting buying commodities in their investment portfolios as the Goldman Sacs commodity fund is up 60% from lows set in December 2008. During that same period, corn is is up 32%, soybeans 24%, wheat 14%, crude oil 233%, and the US Dollar is -14%.

Soybeans were hit with a more negative report today with yields increased .9 bu/ac from 42.4 to 43.3 bu. Carryout for next year also increased from 230 million to 270. The Brazil crop was estimated at 63.0 mmt vs 62 in Oct and Argentina at 53 mmt vs 52.5 in Oct. South America seems poised for average-above average production this year but it's still early, equivalent to our May time period.

Scott Meyer

November 5th, 2009

Good evening blog readers. It is once again Energy Thursday. This week has been another up tic week on the energy market. Diesel prices have jumped this week another .10 cents or so, until today's .03 cent losses. Apparently analysts comments yesterday regarding poor demand fundamentals in combination with expectations for a rise in tomorrows unemployment data gave the bears enough weight to pull crude back under the $80 mark. Yesterdays DOE report showed draws across the complex. Pre-report trade had the market working higher and once the report came out, the large crude draw of 4 million bpd caused a .50 cent jump. But overall refinery utilization was down 1% and crude imports were down about 8.9 million bpd this gave way to demand discussions. With gas unchanged from last year this time and diesel down 14.8% from last year the market cooled quickly with end of day gains of less than .02 cents on product and under a buck on crude. It appears demand numbers are actually effecting trade two days in row. Adding to the bearish momentum is expectations of job data reporting another 175,000 jobs lost in October, and a calling for the highest unemployment rate in 26 years at 9.9%. Tomorrows unemployment report will most likely set the tone for the entire market, it could be the catalyst which sends crude back to the 70's and I don't mean $17.50 a bbl, but the upper 70 dollar range. Things feel bearish at close tonight, hopefully you feel better about a solid day of harvest.
Signing off
Zach Winter

Tuesday November 3rd, 2009

I am hoping that many producers are unable to read this blog tonight and hoping they can get in late from a productive day of harvesting and go to sleep. The corn and soybean markets were supported in higher trade today by gold which was up $30 ounce and now sits at $1,084 a troy ounce. Crude oil also finished up $1.37 as it was another day of commodity fund buying, enjoy it while it lasts because it won't forever. Weather has allowed for harvest to truly commence in our area with lots of corn and scattered loads of beans coming in today. With the harvest glut coming on, corn and soybean basis has faded at every single delivery location with the river leading the way and processors and containers following suit. The December 2010 corn contract hit 4.43 today, giving producers a chance to get some of next year's production hedged with some of the lower input costs they are seeing.

Warren Buffet today, place his biggest bet on a better economy coming, by shelling out 34 billion dollars and buying the Burlington Northern Sante Fe railroad. This is the biggest purchase ever by his company Berkshire Hathaway!

Please continue to be safe out there as the weather allows harvest to ramp up.

Scott Meyer

Note: Corn Products in Chicago will remain open for corn truck deliveries until 3 PM on Saturday, October 31, 2009. After closing Saturday they will re-open at 5AM on Monday, November 2, 2009.

On the roads… The IL 23 bridge over Buck Creek no longer has a posted weight limit. Normal weight limits apply. The IL 23 bridge over Indian Creek, north of US52 remains one lane only at this time.

In today’s trading, grain futures finished a down week with a sharply lower Friday. Sharply lower equity and oil markets led grain futures lower on the day. Thoughts of drier weather in store for next week kept any reaction to the current wet weather at bay. Dec corn finished down 13 ½ today and down 32 for the week. Nov soybeans closed down 7 ½ cents today and down 28 for the week. Dec Chicago wheat futures finished 9 ½ lower on the day and 53 ½ lower for the week.

National average on highway diesel fuel prices jumped another 9.6 cents in this weeks report. This makes the third straight week of up moves. These are the highest levels seen since November 2008.

We were able to get in a little corn harvest between rain drops this week. Getting trucks in and out of fields was challenging but, most have made good field entry and exit plans. Drivers have done a great job working with the field conditions. More rain last night and today will almost certainly keep us out of the fields this weekend and into early next week. Drier weather starting Saturday for several days promises to give us better opportunity for harvest work next week.

Have a great weekend!
Mike Etienne

October 29th, 2009

Good evening blog readers. Thursday is already here, which means, Energy. I bring news of Energy gains. Crude oil settled 3% higher at close today, just under the $80 mark at $79.87. The large bounce in today's market was driven by news that the economy is growing. GDP rose 3.5 percent in the third quarter. Of course today's energy gains are a wash after yesterdays losses, but the positive economic news has created a shift in short term direction. Yesterdays DOE report was interpreted as bearish with builds in crude oil of 800,000 bpd, builds in gas at 1.7 million bpd and draws in diesel of 2.1 million bpd. Just in itself the report is kind of neutral, but in context of early week reporting by the API of large draws across the board, the market reacted bearish with a mild sell off. Losses of .08 cents on gas, .05 cents on diesel, and $2.09 on crude seemed to provide the start of profit taking before months end. But just as we thought a downward push was coming, more money entered the energy market, giving it a firm bounce. Tomorrow could set the tone for next weeks trade as the bulls aim for the $80s on crude. Unfortunately, it seems yesterdays losses will not reach the public end users with gains today, the short term outlook is still bullish on Energy.
Market News:
- Key energy complex catalysts- the dollar's weak showing and stock market gains will continue to push the complex higher.
- Iraq's Oil Ministry said a final deal would be signed on November 3rd with BP and China's CNPC to develop Iraq's largest oilfield.
- Jobs data- is due November 6Th. Currently we are at annual highs, look for the data to provide energy direction. Most likely a gain will only confirm what we think and loss will cause the market to move higher.
- Home buying- It is suspected the Senate will extend the first time home buyer credit to help spur home sales, no time frame has been established.
- Iran- Obama has signed legislation that will penalize oil companies that export gasoline to Iran. This marks the first economic sanctions that Congress has passed regarding Iran.
- US Diesel and Gas Demand- Diesel demand overall is down 13.1% over a 4 week average from last year; While gas is only down 1.9%.

Good luck out there.
Zach

Wednesday, October 28, 2009

The corn market opened lower today based on an improving weather forecast as well as continued recovery in the U.S. Dollar index. The market attempted to rally mid day before closing $.015 lower for the day. The current weather forecast calls for late week rains but a warm dry pattern to begin next week prompting ideas of improving harvest conditions. The market continues to debate the impact of the wet with widespread disease reports and below normal test weight indications, the trade continues to debate a wide range of crop production ideas. It will be interesting to see where the market evolves to on crop size ideas as we approach the November USDA production report two weeks from now. Will the USDA factor expected harvest delays and test weight issues into this report?

Soybeans also continue to see liquidation on ideas of improving weather forecast for more active harvest next week after late week rains end. Delta states, where harvest should have been rapped up a month ago, will have to withstand another pounding 2 to 4 inch rain system following seven weeks of rain before drier weather persists there. We are seeing many in the trade indicating the potential for the 150 million bushels of beans left in the field in the delta to be literally written off due to field damage. Here is to hoping that next week brings back the chance to get some beans out of the field.

Phil Farrell

Tuesday October 27th, 2009

Crop Progress released Monday afternoon

Corn Harvested
US 20% vs 17% lw and 58% avg
Ill 14% vs 11% lw and 77% avg

Soybean Harvest
US 44% vs 30% lw and 80% avg
ILL 33% vs 13% lw and 86% avg

The corn, soybean, and wheat market were all down significantly today with corn losing 7 cents, soybeans 13, and wheat 23. Markets continue to be influenced by a good harvest weather outlook next week. Most of the Midwest is expected to get rain this Thur and Fri but then quickly dry out for the most productive harvest week of the season. Outside markets were slightly higher today with crude up $.80 and the dow up 14 pts to 9882. Harvest progress continues to run a record slow pace. Corn moisture levels are also at record high levels throughout Nebraska, Iowa, MN, and Illinois. Nationally, below average crop condition reports continue to follow above average yield reports on corn.

In the delta, it is estimated nearly 100 million bushels of soybeans are damaged in the field and they will all have to hit the market place when harvested as they will not store. China was also noted today looking to defer Jan-Mar cargoes of beans to other destinations which also led to the weakness in Soybeans. As the day light turns shorter and the harvest progress picks up, please remember to be safe.

Scott

Monday October 26th, 2009

Corn and soybeans took steep loses on Monday profit taking set in after a hitting a four month high, coupled with a stronger dollar and "improved" weather forecast for next week. Dollar bounced from 14-month lows, sparking a broad-base sell-off in commodities. Funds sold an estimated 13,000 contracts today. The USDA released their weekly crop progress report which put US corn harvest at 20%. Traders had been expecting 20% to 25% for this week, up only slightly from last weeks 17%. The 5-year average for corn harvesting at this time has been 58%. With the Federal Reserve's benchmark interest rate holding steady at a record low of near zero, analysts say the dollar has more room to fall. Low interest rates can spur economic activity, but they also tend to weaken a nation's currency as investors search for higher returns elsewhere.

USDA said soybean harvested was at 44 percent, an increase from 30 percent last week, but still below 80 percent averaged during the previous 5 crop years. Corn harvested was estimated at 20 percent versus 17 percent last week and a 58 percent historical average.

Chris Spurlock

Note: Corn Products in Chicago will open at 5 AM Monday, October 26, 2009 for truck corn deliveries.

Corn futures ended lower while soybean and wheat futures were mixed in today’s trading. Most futures started higher on the day but, lower equity and oil markets along with a stronger dollar took their toll at the end of the day. Dec corn finished down 5 3/4 today but, gained an impressive 26 cents this week. Nov soybeans were up a ½ cent today and 28 ½ higher for the week. Dec Chicago wheat futures finished 4 lower while July ’10 was 1 ¼ higher.

National average on highway diesel fuel prices jumped 10 ½ cents in this weeks report to its highest level since last November. As Zach mentioned last night though stocks are ample historically small drops have given traders a notion to run with.

Harvest weather continues to be the biggest issue here locally and throughout most of the Midwest. Rain amounts from 1 ½ inches to over 3 inches have been seen in our trade area the last couple of days. Wet and cool conditions will persist in the coming week giving us only small windows of opportunity for harvest activity.

Have a great weekend!
Mike Etienne

Thursday October 22nd, 2009

Good evening blog readers. It is Energy Thursday, but seeing most of our readers farm, I going to make the assumption that readers this evening are frustrated, wet, and anxious; therefore I will keep it quick and to the point. This week has been another record setter. Crude broke the $82 dollar mark yesterday after the release of the weekly DOE report. Although there were builds of 1.3 million bpd on crude, early expectation were reported at 3.8 million bpd. The market reacted accordingly and the bulls were off to the races breaking the $82 mark, but unable to hold on as crude settled at $81.37. Draws on both gasoline and heating oil helped push both products up about .06 cents. Overall diesel has jumped at the pump almost .40 cents over the past three weeks. Today showed a little profit taking, with small losses across the board. A cent on heating oil and gas, .18 cents on crude. We discussed this last week, but refinery utilization is still way down at 81.1%, which is a slight increase .2% from last week. We are still swimming in supply across the board, but the weekly DOE report seemed to give the bulls just enough to run it up. Four week demand is up on gas 4.2%, while diesel is down 12.1% from last year. A stronger dollar helped keep larger gains at bay today, but with positive earning reports by the blue chips and the index of leading economic indicators rising 1% to 103.5, its highest level since October 2007, the bulls are still in control. The good news is with high energy, we might see more gains in the grain world. Most of us won't mine paying more for our fuel if we can see large grain gains. With the rain in the near forecast, everyone will be anxious to get back in the fields, but as Scott mentioned a few days ago, remember safety; There is always another harvest but not always a second chance to slow down and make a good decision.
Good luck out there.
Zach

Wednesday, October 21, 2009

Wow! The word of the day in the commodity markets was inflation with many commodities making new highs for their respective moves. The counter to the commodity strength was the new 12 month low for the U.S. Dollar index near 75.00.

Corn and soybean markets posted impressive rallies today with corn up 13 to new highs and November beans closing over $10.00 for the since Mid-August. The market strength was partially attributed to poor harvest weather progress and forecast for more of the same but also by outside market influences. Pick your commodity sand it was pretty much higher today with crude oil up $2.00 and now over $80.00 for first time since last October gold was up $5.00 to $1063 and ounce.

It was a slow day harvest day today and some of us actually had time to speak to Fox Business Channel. Their main topic of discussion was the strong corn and bean markets and the hedge fund money that seems to be investing in commodities again...

Phil

Tuesday October 20th, 2009

I am hoping that most of you farmers are too tired tonight to read this blog due to completing a full day's worth of harvest. Unfortunately I suspect that the clouds didn't allow many the opportunity to get much done today on soybeans. Corn closed down $.01 today and soybeans down $.14 in a market that ran out of fund buying today. Crude finished down $.50 and the down dn 50 pts.

Corn has been trickling into the elevator with moisture anywhere from 24-38% and test weight from 48-54. It looks like corn that was fully mature has lost 1-2% in moisture over the last 3-4 days as the weather has gotten back to NORMAL for this time of year. The extended forecast calls for below normal temps and above normal precip so lets hope for the "weathermen are only right 50% of the time".

Soybeans had far and away the biggest harvest day so far yesterday and many have tried again today with mixed results, where is the sun? Soybean basis continues to have a firm tone to it as harvest can't catch up to the current demand. Yields on beans have been at the very least better than they looked - to very good.

Corn yields have also been better than the corn looked but on average 20 bu less than last year. Nationally, I read today that in Hopkinsville KY, 4500 acres have been picked with a running average of 200 bu/ac on ground that has a 5 year avg of 155! Good luck to all of those out there harvesting and remember safety.

Scott Meyer

Monday October 19th, 2009

Corn and soybeans saw double digit rallies again on Monday as concerns continue to mount about the slow progress of the corn and soybean harvest, as rain continues to hamper harvest progress. The U.S. harvest of corn and soybeans is off to the slowest start since at least 1985, when the U.S.D.A. began issuing weekly harvest progress figures, the agency's latest weekly report showed. The USDA reported on Monday that only 17 percent of the U.S. corn crop has been harvested, down significantly from the 5-year seasonal pace of 46 percent. It said crop conditions remain favorable. The USDA said that only 30 percent of the US soybean crop was harvested, compared to a normal season pace of 72%.

U.S. stocks rose to fresh 12-month highs on Monday as optimistic investors rode a wave of solid quarterly earnings. The dollar hovered near a 14-month low against the euro on Monday as investors bet the Federal Reserve will hold U.S. interest rates near zero well into the coming year. The euro traded within half a cent of $1.50, a level not seen since August 2008.

Chris Spurlock

Note: Corn Products in Chicago will open at 5 AM Monday, October 19, 2009 for truck corn deliveries.

Grain and soybean futures were lower across the board in today’s trading. Dec corn finished down 1 today but, gained 9 ½ cents this week. Nov soybeans were down 5 ½ cents today but, 13 ½ higher for the week. Export sales out today were on the low end of trade expectations for corn and slightly above expectation for soybeans. A small window of drier weather starting this weekend through early next week gave the market hope of a pickup in harvest activity. Dec Chicago wheat futures finished 6 ¼ cents lower. .

National average on highway diesel fuel prices ticked up a bit this week rising almost 2 cents per gallon. Crude oil trading higher this week will likely continue the up movement in diesel prices.

Weather continues to play havoc with harvest schedules. While we have seen other years of slow corn harvest nationally, soybean harvest is off to its slowest start in the last 20 years. Hopefully a window of drier weather this weekend and early next week materializes and allows us to get harvest moving locally.

Have a great weekend!
Mike Etienne

Thursday October 15th, 2009

Good Evening Coop blog reads. How about that Energy Market? If you dabble in spec trade you are probably jumping for joy this week. It has been a week of large gains across the board in products and crude. Energy futures hit a new high for 2009 with the release of this weeks DOE report showing draws in product and slight builds in crude. The story really began earlier this week, with large gains on Monday after the Saudi's released public statements about intentions to shut down all exports in the month of November and expect others to follow suite. Later in the day Valero and Sunoco shut down their New Jersey and Aruba refineries for an undisclosed amount of time to cut production rates. Apparently others have follow suite, with refinery runs plunging this week by 4.1% to 80.9% capacity; Expectations were a mere -.4%. We have seen gains everyday this week due to a weak dollar and positive financial reports on economic recovery. The technical picture is bullish with crude establishing new 2009 highs. Crude closed at $77.58 and heating oil came in .075 cents higher at $2.018. Gas closed .087 cents higher putting its weekly gain to about .16 cents.
The short term energy market outlook is bullish across the board. The DOE reported draws on diesel at 1.1 million bbls per day, with four week demand down 10.8% from last year. Why bullish with demand down you ask? Well, currently fewer diesel product will be made as refineries cut production, combine that with a late harvest and heating oil tanks filling with an early season chill and you get a bullish atmosphere. All of these factors will drive weekly demand over the coming months, continuing inventory reports to read bullish with draws. Gasoline showed draws of 5.2 million bbls per day, crushing early expectations of a build, opening the door for numbers to sore. Look for gas to test summer highs of 2.11. Gas will cost more tomorrow so if you reading this and can still make it to the station, fill up. Crude is forecasted to continue its climb with some calling for the $88 dollar mark. We are still long way from $88, but with $3.00 a day gains it will not take long to get there. My prediction is for some profit taking tomorrow, so expect a little give back tomorrow. On the other hand, we are out of our trend of 65-75 and its time for a new trend to be established.
Thanks for reading.
Zach Winter

Wednesday, October 14, 2009

Corn explored the upside today, but ultimately failed to hold early gains to settle just 1-2 cents better. Early in the session, corn saw gains of 6-7 cents. The outside markets again were supportive with the DOW topping 10,000 for the first time in a year and crude oil up $1.25 to 75.40. The Dec 2009 corn contract settled at $3.83 and the Dec 2010 settled at $4.20. There has been a noticeable increase in producer movement in the last three days that may have helped keep corn from posting the stronger gains into the close.

The soybean market also finished the day marginally higher after racing to significant gains shortly after the open. They were just 1-4 cents higher at the end of the day. Gains in crude oil and meal helped to drive the early strength and let the market avoid a letdown after a disappointing industry report. For the third straight session, the Nov 2009 beans moved above $10.00 but failed to close above it. They were up just 1 cent to $9.94 at the end of the day. The Nov 2010 was also up a penny, settling at $9.76 ¼. The bean spreads were mostly weaker on the day.

Locally the chief topic today seemed to be high moisture in soybeans. We are seeing producers poke into fields throughout Northern Illinois only to find that the beans are testing in the 16% + level with one sample into Morris yesterday testing at 21%! What to do with these beans? We do know many are putting them into farm bins with some sort of low heat, we are examining the possibility of drying them in our elevators but there are problems presented there as well. Here is to hoping for dry / warm weather next week to allow us all to move to the next issue, wet corn.

Phil

Tuesday October 13th, 2009

Crop progress out this afternoon with the government offices closed yesterday. Corn Mature at 74% vs 57% lw and 92% avg. Corn harvest at 13% this week vs 10% lw and 35% on average. Soybean harvest at 23% vs 15% lw and 57% on avg.

A day of consolidation in the corn pit today as futures ranged from up 5 cents to down 7 cents and closed up 1/2 cent. The corn market continues to debate the affects of the hard freeze over the weekend and how much grain was lost due to yields and quality problems. What harvest reports are coming out continue to be good yield wise but most of them come with extremely high moisture levels and scattered damage reports. Crude oil managed to close $1.16 higher as outside fund money continues to flow into commodities. The funds are estimated long 115,000 contracts of corn as investors look for a hedge against the US dollar.

Soybeans ended the day down 6 cents after having a large trading range of 25 cents. Soybean harvest has been hampered by cloudy cool conditions as moisture levels continue to run above 15%. Nearby soybean basis continues to be firm with the lack of harvest and the huge demand for the 1st quarter of the marketing year.

Scott Meyer

Monday October 12th, 2009

Both corn and soybeans saw a strong rally on Monday as cold weather over the weekend followed by forecast of cold temperatures over the next week send fear through the market of damage to the late maturity crop. Current estimates have pegged loss at around 200 million bushels after a hard freeze through most of the northern growing region this past weekend. The dollar also experienced weakness today as investors sought the higher yielding returns of other currencies.

Snow fell in some areas, with accumulations of 2 to 4 inches (5-10 cm) and "locally heavier" amounts in northern and western Iowa, southern Minnesota, eastern South Dakota and eastern Nebraska. Farther west, roughly 12 inches (30 cm) fell at North Platte, Nebraska. All but about 4 inches had melted by Monday morning.

Please Note: USDA will release their crop progress report tomorrow afternoon due to Columbus Day.

Chris Spurlock

Corn and wheat futures were lower and soybeans higher in today’s trading. Dec corn finished down 1 ¾ cents today but, gained 29 cents this week. USDA was out with slightly higher production numbers this morning but, a lot of focus is on the weekend weather with frost and freezing expected through much of the northern corn belt. Nov soybeans finished 28 cents higher today capping a 79 cent gain this week. Delayed harvest along with good demand in place from both exporters and processors helped support prices even as USDA showed increased supplies will be ahead both domestically and from South America. Dec Chicago wheat futures finished 6 cents lower. Increased US and world supplies pressured wheat prices.

National average on highway diesel fuel prices continued down this week dropping almost 2 cents. Though supplies remain strong, trading this week is likely to start pushing prices up again.

Export sales out yesterday were generally disappointing for corn and soybeans. Substantially below the previous week’s very good numbers. However export sales still look strong overall. For the week ending September 24, unshipped grain export balances reached 35.3 million metric tons. 34% higher than last year at this time. Unshipped balances of soybeans are 95% higher than last year while corn unshipped balances are 15% higher than last year at this time. Part of the reason for the higher level of unshipped balances may be due to corn and soybean harvests that are delayed by rainy weather. Harvest pace should pick up over the next month compressing demand for transportation services across all modes into a shorter time period.

Have a great weekend!
Mike Etienne

USDA Update: 10/9/09

Report highlights:
Corn acres down 600,000, beans acres down 200,000, and wheat acres down 700,000
Corn exports cut 50
Bean exports increased 25

Corn yield 164.2 vs. 161.9 in Sept and 162.57 est.
Bean yield 42.4 vs. 42.3 in Sept and 42.78 est.

09/10 ending stocks
Corn 1.672 vs. 1.635 in Sept and 1.668 est.
Beans 230 vs. 220 in Sept and 249 est.
Wheat 864 vs 743 in Sept and 802 est.

Production
Corn 13.018 vs. 12.954 in Sept and 12.986 est.
Beans 3.250 vs. 3.245 in Sept and 3.281 est.

World ending stocks
Corn 136.3 vs. 139.1 in September
Beans 54.79 vs. 50.53 in Sept

CBOT calls as of 8:30 range from: corn down 3 to up 7, beans down 10 to up 10, and wheat down 5-10 to up 7.Let’s go with steady to a nickel either side to start in beans, corn down 3-5, and wheat down 5-10.Don’t be surprised with a two-sided day as the trades decides whether this week’s rally has factored in the wetter forecast.

Phil

Thursday October 8, 2009

Good evening Elburn Coop blog readers. Once again it is Thursday, which means... Lets talk Energy. It appears we are still in the same cycle we have seen for the past couple months. Choppy day to day trade with about .10 cents of weekly volatility in product and $3.00 volatility in crude. Crude oil rose to a two week high today of $71.69, as the dollar declined and stocks rose on news that the number of Americans filling jobless claims dropped. New applications dropped to the lowest levels since January, but overall unemployment rose to 9.8%. The dollar dropped to a 14 month low, against a basket of currencies. It is thought that without the jobs data we would of only seen the energy market jump half of what it did. It appears the bulls ran with the data and we saw a .06 cent gain in both products today. The question is will there be positive news tomorrow to continue or will the bears pull things back a bit? What will the dollar do? What will the equity markets do? Overall we will most likely stay in the same range we have seen, choppy but steady numbers range.
Crude Oil
Crude Oil this week showed a draw of million bpd. It was not much of surprise with decreased imports and builds in product. It is an interesting tactic to increase production in a weak market, but it does create an illusion of increased demand any time a draw is recorded. Look a little further and you see a huge build in gas, I wonder what they turned the crude into?
Gasoline
Gas showed .05 losses yesterday as the DOE report showed builds of 2.9 million bpd. Expectations were a build of 1 million bpd, so needless to say it had a negative impact on prices. But short term losses came back today to close .06 cents higher as if yesterday didn't happen. Over all 4 week demand is up 6.2% percent from last year, giving cause to increased prices. Look to pay a little more at the pump by the weekend.
Diesel
Diesel saw gains of .065 cents today, which trump yesterday's .03 cent losses. As we have seen over the past couple of month in the market or you have seen as you drive around, not much is going on out on the road. Diesel's four week demand is down 9.5% from last year this time. The DOE reported builds of 700,000 bpd in product confirming yesterdays losses. It seems the market was a little over done today with .065 cent gains, look to get a little back tomorrow. If the market doesn't correct itself tomorrow,expect to pay more for your diesel as you get in the fields.

Zach Winter

Wednesday, October 7, 2009

Corn and soybean harvest has actually started in Northern Illinois. We have received the first bushels of the 2009 corn harvest today with the sample predictably wet at 30.9% moisture on the corn and 15.0% for soybeans.

The Corn market put in a more tempered session today after the sharp gains from Tuesday. Traders are looking forward to the USDA crop production estimate due Friday morning. The average trade guess for corn yield is 162.7 up slightly from USDA September estimate of 161.9. The ending stocks estimate of 1.675 billion bushels is pretty much reflecting thoughts that USDA will leave demand estimates unchanged this month. The current weather forecast is little changed with heavy rains forecast for much of the corn belt with cold weather to follow. The market will continue to monitor forecast for early next week with the 28 degree line currently projected to end the growing season for most all of the Western and Northern Corn Belt for Saturday through Monday night. The rumors earlier in the week of Brazilian ethanol imports still seems to be just that but seems like there could be a cargo or two at some point. Export sales report will be out tomorrow morning, corn sales are expected to be in the 28-39 million bushel range.

Soybeans were a quiet affair as well with futures gaining a couple after the $.25 gain on Tuesday. The bean market isn't nearly as concerned about the cold weather forecast for next week but export traders are getting concerned about the timing of harvest with export vessels waiting in port for the rain delayed harvest to start supplying the market. The trade guess for the Friday report is 42.9 bpa compared to 42.3 in September. The guess for ending stocks of 257 million bushels would imply that traders are looking for USDA to increase the demand estimate from a month ago. As mentioned last week, most of this demand is expected to be front end loaded with South American production currently expected to be up 25 million ton (919 mbu) from a year ago. This helps put a bit more perspective on exporters awaiting the U.S. soybean harvest, they need it now not later...

Phil

Tuesday October 7th, 2009

Commodity prices exploded higher today as renewed frost concerns arose. Corn finished up 17 cents after being up 29 at one time while soybeans finished up 25 after a high of 36 cents. Outside markets were also supportive with crude oil up $1 most of the day, the dow up 130 pts and the dollar lower. Weather maps point to an almost imminent frost for a majority of the northern corn belt this weekend and into early next week with forecasts of 28 degrees as far south as St. Louis.

The 6-10 day forecast also shows much below normal temps to further slow down the already late crop. Large moisture amounts are seen Thur - Fri over a large part of the belt to delay any harvest of crops that are ready to go. December 09 corn hit prices not seen since Aug 5th.

Corn bushels in jeopardy or not mature by this weekend include N. Dakota, S. Dakota, and Minnesota with 690 million bu combined, Iowa with 125 mbu, Nebraska 75 mbu, Wisconsin 183 mbu, and Illinois has the most at risk with estimates of 800 mbu.

Soybeans traded 25 cents higher in most part due to corn being up near limit. The soybean crop is not perceived to be in as much danger or loss from a frost this weekend, but weather outlook for the next 3-5 days will certainly impede harvest progress. Check the weather forecasts tonight to see what they have for low temps.

Scott Meyer

Monday October 5th, 2009

Corn finished the day higher on worries that a killing freeze could potentially damage the immature crop. The market has also been supported by a delayed harvest as the pipeline finds difficulty in sourcing corn. USDA said tonight that 10% of the crop has been harvested nation wide, traders had been looking for between 9% to 12%. The USDA also pegged maturity at 57% vs. 70% a year ago and 84% on the 5 year average.

Traders also said the market was getting support from talk that Brazil will need to import U.S. ethanol to alleviate a tight supply situation. The talk is that a U.S. company is going to ship two cargo's to Brazil.

Soybeans ended steady to modestly lower Monday, managing to find price support after initially sliding to 6-month lows. The "wildcard" of the market remains weather, and with the threat of a growing-season-ending Midwest freeze and the potential for additional harvest delays this week, cautious traders took the opportunity to cover some shorts after recent declines.

Chris Spurlock

Note: CPC-Chicago and IRE-Rochelle will both be closed for truck corn deliveries on Monday, October 5, 2009. CPC will reopen Tuesday at 5AM. IRE will not reopen until Wednesday.

Corn and wheat futures were lower and soybeans sharply lower in today’s trading. Dec corn finished down 7 cents today but, was only ½ cent lower for the week. Corn was pressured by Informa’s crop estimate that indicated 168 bu/ac yield is still possible. Nov soybeans finished 33 cents lower today and down 41 cents for the week. Informa’s estimated bean yield of 44 bu/ac sent beans lower helped by early estimates of a potential record Brazilian soybean crop that is just being planted. Dec Chicago wheat futures finished 11 ½ cents lower.

Export sales out yesterday were higher than estimates with soybean sales continuing to be exceptionally strong. Soybeans sales recorded in September this year were higher than any September in the last 20 years. Total sales commitments for this crop year that began Sep 1 are 741 million bushels. This is a record for sales recorded by this date surpassing last year’s mark of 384 million bushels which was the previous record. China’s hefty soybean purchases thus far are the reason for the increase. China accounts for over 60% of the total commitments so far at 12.1 million tons. The 2nd best buyer is Japan at just under 1 million tons. It will be interesting to see if and for how long China’s appetite for US beans continues. If large South American crops materialize they will attract Chinese buying interest quickly.

On highway diesel fuel prices dropped a little more than a cent for the third week in a row. Ample supplies and weak demand continue to keep prices in check.

Have a great weekend!
Mike Etienne

Thursday October 1, 2009

Good evening blog readers. Lets talk Energy. The week started slow after last weeks test of multi-month lows, but a large rebound was post yesterday after the DOE report read bullish. Well it read bullish to investors, I am still trying to figure out how builds of 2.8 million in crude for the second consecutive week is bullish. Never less, gains of $3 and some change were posted and more importantly they held today with an additional bounce of .21 cents to close above the $70 mark at $70.82. After yesterdays close the market talk was still a bit negative, thinking the gains were over done and today would be a profit taking day. The day looked to begin just as predicted, with a strong dollar, weak housing and manufacturing reports, but no losses were recorded by days end. We are still trading in the 65-75 dollar range so unless either are tested, we will most likely remain in this trend. The energy market weathered what looked like a perfect storm today, don't look for much change tomorrow.
Diesel
Diesel saw large gains this week, with nine plus cent gains yesterday. The DOE report showed builds of 300,000 bpd and over all four week demand down 9.2% from last year. While builds were not what we have seen the past few weeks it is wonder how builds can still provide a boost of almost a dime in a single day of trade. Not to mention refinery utilization is down 1% this week to 84.6% of total capacity. I really thought the market was over done yesterday, but we saw less than a half of one cent come back. You will most likely see consumer diesel prices jump about a dime at the pumps over the next couple of days.
Gasoline
Gasoline seems to be the catalyst for this weeks gains. The DOE reported a draw of 1.6 million bpd giving a boost to the entire energy market. Gas has a four week demand increase of about 5.4% from last year this time. Look for prices to increase at the pump over the weekend, with small gains of about half a cent today and ten cents of gain yesterday.

Wednesday, September 30, 2009

USDA September stocks report:

Corn carryout: 1.674 billion bushels, slightly below expectations of 1.695
Bean carryout:138 million bushels, well above expectations of 110 mbu.
USDA also revised 2008 soybean production upwards 8 mbu to to 2.967 bbu.

Corn opened lower on weakness in equities and the wheat markets. The market was able to turn higher on a round of late fund buying and outside influences. Traders also continue to watch as corn struggles to reach full maturity with the recent frost in the Midwest and now forecasts for rain events this and next week. There was talk of investment flows into commodities for the end of the month with corn purchases by funds estimated at 5,000 contracts or so today.


Soybeans opened lower on a revised production number from last year, resulting in an unexpected increase in ending stocks. Prices rebounded on outside influences and quarter-end positioning near the close. Commodity funds were estimated to have bought 3,000 contracts of soybeans on the day. The soy oil market lent support to the complex with gasoline futures up $.11 per gallon today! Soybeans also saw some support from expected harvest delays from widespread rain later this week...

Phil Farrell

Monday September 28t, 2009

Corn closed 5 cents higher on firm outside markets ie: crude up $1.10 and dow up 124 pts. China corn production estimates are also coming out at 149.8 million metric tons which would be down 11 mmt from the last USDA number or over 400 million bu less and the lowest production in 3 years! Cold and wet weather forecasts also limited selling as the latest crop on record tries to finish things up. Cash corn movement remains light with only scattered old crop "clean the bins out" selling occuring. Corn basis levels are firm for nearby with many producers looking to start or switch to beans for the next 2 weeks and give corn more time to dry.

Soybeans were down 6 cents today with good harvest progress reported in IA, NE, and MN. Yields continue to impress with very few reported in the 40's. Soybean basis is also firm nearby as the pipeline still can't get enough to meet the robust demand we currently have.

Read an article today that a 250 ton gate fell off on the Markland Lock on the lower OH River and is slowing down traffic as an auxiliary lock is being used but it is 3 x slower. Estimates are for the repairs to the main gate taking months to complete. With all of the updates needed all along the Ohio and Mississippi River locks and damns, it is amazing more damages like this don't show up.

Harvest Progress:

Corn
IL 2% vs 28% avg
US 6% vs 18% avg

Soybeans
IL 1% vs 21% avg
US 5% vs 18% avg

Scott Meyer

For those hauling grain to Ottawa, the 15 ton weight limit continues to be in place on the IL 23 bridge over Buck Creek just north of Ottawa. This issue will likely be with us for several weeks if not months. IDOT engineers are currently working on plans to repair the bridge but, it will take some time.

Corn futures were slightly lower, soybeans a little higher and wheat sharply lower in today’s trading. Dec corn finished down 2 ½ cents today but, was 16 cents higher for the week. Nov soybeans finished 6 ½ cents higher today but, down 15 cents since last Friday’s close. Dec Chicago wheat futures finished 23 ¼ cents lower as continued talk of CFTC’s recommendation to implement variable storage rates and plentiful world supplies pressured prices.

On highway diesel fuel prices dropped a little more than a cent for the third week in a row. Continued relatively strong supplies of crude oil and petroleum products against weak demand should continue to hold prices in check. Crude oil traded substantially lower this week.

Have a great weekend!
Mike Etienne

Thursday September 24, 2009

The Energy Coaster by Zach Winter. Crude futures settled at $65.89 today, the lowest settlement since July 29th when sellers managed to push the value as low as $63.35. Crude lost just over three dollars on the day right at four percent additional loss on top of the Wednesday settle. Sellers were active from the get go and gained momentum following the latest report detailing home sales continue a weak sales cycle and reawakened worry over economic recovery. The dollar added support to the downward plunge as it gained against the euro. Heating oil or Distillate as we have talked in the past has hit an eight week low of $1.6814 and gasoline/ RBOB hit four month lows of $1.636. The short term outlook still remains bearish unless today’s market activity is over analyzed. This weeks DOE report provided the beginning of the downward direction with builds on all product. It was expected that we would once again have a draw on crude with low imports being reported, but as it turned out demand was weak enough to post builds across the board. As it stands crude stocks are at 335.6 million bbl, an annual increase of 32.2 million over last year. Similarly product reflects the same story, with builds in Distillate at 40.8 million bbl and Gasoline at 20.6 bbl. Watch the trend of the dollar to find tomorrows direction, but keep in mind the sideways trend of $65 to $75 crude. We are still in the range to maintain what we have seen over the past couple of months. This could be a great buying opportunity on the product side; multi month lows are just that.
Thanks for reading.
Zach Winter

Wednesday, September 23, 2009

Corn closed $.04 higher today with December futures trading in an $.18 range. The overnight markets were weak with outside crude oil and gold lower and some forecasters moderating the potential for frost. Some of the noon weather models today put the potential for frost as far south as Northwestern Illinois and Southeast Iowa with the potential for patchy frost into central Illinois. This was enough to allow corn to rally despite the weaker influences from beans, crude oil, etc. There seems to be some other factors at work on the corn market as well with many analyst seeming to take the top end off of the yield discussions for reasons other than frost such as early results from Central Illinois showing field damage. It is too early to tell if these influences will continue because there still seems to be a lot of corn to be harvested and find a use for. Either way today and yesterday were certainly days where traders took profits on short positions in corn to evaluate crop potential.

The bean market doesn't seem to be as concerned as corn about crop prospects with bean maturity further along and early yield results promising. Beans were lower most of the day, closing down a penny or two but certainly have not had the interest from buyers that corn has had. Part of the bean price issue may be due to longer term ideas that South America will have a record bean harvest with Argentina coming out of a drought reduced 2009 crop and Brazil increasing bean acres. The bean market is setting up to have record export demand for the first half of the year before South American supplies take over the world market. This could lead to a situation where cash bean basis levels for December - February could be the best opportunities to move beans into the market. Beans delivered to our Morris elevator for December and January are currently $.135 over the January futures contract, this is probably the best these values have ever been this far in advance.

Phil Farrell

Tuesday September 22th, 2009

Another Tuesday and another frost alert. Today's forecast for freezing temperatures Sept 28-29 were not as dramatic as that of a week ago but never the less shows damaging frost as far south as Northern Iowa and Northern Illinois. Corn rallied 10 cents on short covering along with the outside markets flip floping yesterday's trade with crude up nearly $2, stock market up 51 pts to 9829, and the dollar losing to every other currency.

Funds were noted buyers of 10,000 contracts of corn vs the nearly 40,000 last week they bought on the frost concerns. Soybeans maturing fast should limit yield lost in late September but yield and quality concerns could arise in corn.

Early yield reports have been impressive with corn and bean yields in Tennesse, Kentucky, Missouri, and Ohio showing the best gains over last year and 5 year averages.

Scott Meyer

Monday September 21, 2009

Maturity of U.S. corn improved during the latest week but remains well behind the average due to a wet spring, according to the crop progress report. USDA said the corn crop was 21 percent mature, up from 12 percent last week but off the five-year average of 55 percent. Soybeans dropping leaves, a sign of maturity for the crop, was higher at 40 percent, an increase from 17 percent last week.

The dollar hit a near two-week high against the yen on speculation the U.S. Federal Reserve will announce "they're going to start removing stimulus" measures. Oil prices dived 3 percent on Monday after the dollar rebounded and soybeans fell as much on fears of a big crop, combining in a broad commodities sell-off.

Traders note that the GFS model still is calling for a light frost/freeze in the northern Dakotas/MN toward the 1st weekend in October but other private forecasters are dismissing this model. They believe that the GFS model is wrong and no frost will occur. Even if frost does occur the 1st week in October, the market believes it will cause more of a problem on quality than it will with quantity (with the exception in North Dakota where it will do both).

Chris Spurlock

Note: Corn Products in Chicago will be closed for truck corn deliveries Monday and Tuesday next week. Reopening 5AM on Wednesday, September 23, 2009.

Corn and soybean futures both fell sharply at the end of today’s trading session. Noon weather maps showed no threatening temperatures through Oct 4. Dec Corn was down 11 cents for the day, losing 2 cents for the week from last Friday’s close. Nov soybeans were down 12 cents for the day but, did manage to gain 38 cents for the week. Soybean basis levels were also under pressure to end the week as reports of harvest activity increased. Rain in the Mississippi Delta and Southeastern US has hampered harvest progress in those areas.

Cattle on feed showed a 1% drop vs. this time last year. Notably fed cattle marketings in August were 4% below last August and the lowest level for any August since recording started in 1996. Ethanol and DDGS prices were reported higher this week in Illinois (and to a lesser degree in Iowa). Along with relatively good export sales, improving margins in ethanol production should help strengthen demand for corn.

On highway diesel fuel prices dropped a little more than a cent again in this week’s report. Second week in a row prices retreated. Strong distillate stocks continue to pressure prices. Crude oil traded somewhat higher this week which could lend some support going forward.

Have a great weekend!
Mike Etienne

Fundmental Update 09/18/09

FUNDAMENTAL UPDATE:
Corn export sales are off to a decent start this marketing year, lagging the torrid record pace of two years ago, but comfortably ahead of last year. Cumulative corn sales of 537 mln bu are 48 mbu ahead of LY (including carryover and the first two weeks), comfortably in position with the USDA estimating a 350-mbu year-to-year jump to 2.2 billion bushels.

The huge soybean export sales carryover has cumulative sales 304 mbu ahead of LY at this point, with the USDA estimating exports for this year to equal last year. It should be noted that this years soybean export pace is expected to be heavily front end loaded with and expected record large South American crop expected to largely supply the world market from March forward.

Thursday September 17, 2009

Good evening blog readers. Zach here, with an energy market update. After yesterday's large gains across the energy market, we closed today relatively unchanged. Most of the focus in commodities has been on equities and the dollar market, both of which closed flat, but have been the catalyst to the bullish influence this week. Yesterdays DOE report came in once again with large draws in crude and builds in both gasoline and diesel. The combination of a weak dollar and bullish crude sent the energy market up, even with considerable product builds.
Diesel
Distillates stock are at their highest level since 1983. The prospect of large gain in the short term should be limited, if the rule of supply and demand is still followed. Builds this week were 2.2 million bpd, which means usage is down over a four week average from last year by about 6.8%. With all this state the market still jumped about .07 this week thus far.
Gasoline
Gas had a small build of 500,000 bpd, which isn't much of a change from last year this time. Gas has moved about .07 this week as well, unless we get losses tomorrow, look for it to shake out in the pumps over the weekend.
Crude
Crude once again this week came in with large draws, 4.7 million bpd. Crude continues to position itself in the upper $60's to mid $70's. In the short term watch for the August high of $75 and support to be found around $68.

Zach Winter

Wednesday, September 16, 2009

So much for the frost scare of 2009?

Corn traded lower in sympathy with the soybean complex and and updated warmer weather forecast for next week. South Korea and Taiwan also passed on tenders for corn because the price was said to be too high. Commodity funds were estimated sellers of 8,000 contracts after buying an estimated 25,000 contracts yesterday.

Soybeans were lower on profit taking and weather. There was support at mid day as outside markets, energy, metals and equities were all firmer on the day.

Tomorrow the weekly export sales report will be released, Corn sales are estimated to be 25 - 35 mbu, beans 22 - 30 mbu. Also USDA will release Cattle on Feed report on Friday, estimates are 98.5% on fee with August placements at 100.9% and marketings at 95.3% vs a year ago. I would also expect that we haven't seen the last of the Frost talk by the trade, we will likely be on this on and off until October 10 or so.

Phil Farrell

September 14th, 2009

Frost Alert!!

Morning weather forecasts put cold air into the 10 day outlook with Sept 24-26 targeted with high 20's in northern belt areas of the Dakotas, Minnesota, and Wisconsin. Early forecasts also had low 30 degree weather in Northern Iowa and Northern Illinois. With this information, corn was up a dime and beans 30-40 higher. The noon forecasts started coming in around 11:30 with some predicting much colder and much more widespread cold temperatures.

The noon run had widespread freezing temps as far south as Missouri with even areas like Memphis TN getting into the low to mid 30's come Sept 24-26. Upon news of this colder forecast, funds began a massive short covering as it is expected they bought between 20-50,000 contracts of corn and up to 15,000 contracts of soybeans. Corn hit limit up of 30 cents for 5-10 minutes before finishing up 28.75 while soybeans popped up 67 cents before closing up 51. Farmer selling in the market was noted but not enough to offset the aggressive money managers who saw Dec 09 corn trade above it's 50 day moving average for the 1st time since early June.

Watch the extended weather forecasts for direction the rest of this week.

Scott Meyer

Monday September 14, 2009

It was a rather quiet session to start the week as the grain markets were pulled in two directions. The market still continues to focus on the possibility of a season ending frost/freeze next weekend. The various weather models have been consistent lately in projecting colder than normal temps in the 10-12 day time frame with the debate really coming down to whether or not the temperature will drop low enough to do damage to the crop. Right now it looks as though freezing temps would remain to the far northern Midwest (N. Dakota, northern Minnesota, and northern Wisconsin) with only patchy frost seen further south into northern Illinois and Iowa.

Corn conditions this afternoon were unchanged at 69% good/excellent although the USDA did report a 1% move from good into excellent. The crop continues to lag as corn dented was at 66% vs. 76% last year and 86% on the five year average. Corn mature was 12% vs. 17% last year and 37% on average. Harvest continues to move north with good yields seen this weekend as far north as KY and southern IL.

For those hauling grain toward Ottawa, please note the Illinois DOT has placed a 15 ton weight restriction on the bridge that carries Illinois 23 over Buck Creek, 3 miles north of Ottawa. Deterioration of the steel superstructure was listed as the reason and they stated emergency repairs will be made to remove the posting as soon as possible.

On highway diesel fuel prices dropped slightly in this week’s report ending a six week run of increases. Strong distillate stocks and crude oil trading lower today should help keep diesel prices in check for the near term.

USDA stocks and production reports today showed record yields in corn are expected with the total US crop expected to be the 2nd largest on record. Interestingly, the Illinois yield is now expected to equal last year’s at 179 bu/ac. Corn futures were supported late after spending most of the day in the red. Dec corn finishing 4 ½ higher. Though the production is expected to be higher, feed usage and exports for next year were increased to net a smaller than expected increase in carryout next year. Soybean production is expected to be a record this year. Soybeans spent most of the day under pressure. Nov soybean futures closed down 23 ½ .

Have a great weekend!
Mike Etienne

USDA Report Flash September 11 8:45 am

Corn
Market expecting a record US yield on corn and we got it. 161.9 bpa vs 159.5 last month. This puts production up 193 mbu but we will carry in 35 mbu less from the old crop due to better old crop demand. New crop usage also up 50 mbu on feed, up 100 mbu exports, ethanol unchanged. So… 164 mbu higher supply, 150 more usage, adds 14 mbu to carryout netting 1.635 bbu. The market was expecting something approaching 2 bbu. So, maybe this bearish report isn’t quite so bearish.

Beans
Old carry in is unchanged at 110 mbu. Production up 46 mbu due to 6/10ths of a bu increase in yield to 42.3 bu/acre. Usage up 35 mbu: 20 on crush, up 15 on exports. Net new-crop carryout up 10 mbut to 220 mbu.

Globally, world coarse grain ending stocks are up on old crop 1.5 mmt, but down for 09/10 1.6 mmt. Little bullish World bean stocks of .8 mmt old, and up .2 mmt for 09/10. Neutral

Sell the rumor buy the fact? Calls are firming up, maybe higher?

September 10, 2009

A week in review, The Energy Market. The much anticipated OPEC meeting turned out to be nothing more than a nice vacation for attendees. Early week press releases indicated production would be kept as status quo and they did not disappoint. It appears OPEC is happy with 65-75 dollar crude. One thing to keep an eye on is OPEC compliance. Countries like Iran and Angola have had trouble in the past holding to the daily limits, OPEC is reporting compliance has fallen from about 80% to 70%. Apparently its hard for some to stop milking the cash cow. The Department of Energy weekly report is in and no fireworks have been spotted. While the news is note worthy, the market has yet to digest what the report means. The crude inventory numbers read bullish, with a draw of about 5.9 million bpd, but the 2 million bpd build in both gasoline and distillates could slow the market. A hopeful outlook could be a jump in crude prices causing other commodities to gain momentum, all the while a tapping of the breaks on the diesel product that goes in the tractor. Breakdown:
Distillate
The short term out look is slightly bearish. With a 2 million bpd build and demand over the past four weeks down 5.6% from last year, there is still room for down side in the market.
Gasoline
Gasoline inventories came in slightly higher at 2.1 million bpd sending the market down about .02 cents throughout the day. Like diesel, gasoline demand is down over the four week spread from last year by about 2.2%. I wouldn't look for much change until next weeks early API inventories are reported.
Crude
The short term looks bullish. With draws near 5.9 million bpd, the only thing that could slow the market will be the large builds in product and a strengthen in the dollar. As for now the market seems content to trade crude in the 70-75 dollar range. We closed under $72, but watch for overnight trade to test mid $70's.

Do not forget this weekend is Sandwich Fair, take the kids out and get a corndog.

Zach Winter

Wednesday, September 9, 2009

Corn had another choppy day of trade with a relatively tight range ending a couple pennies higher; this is the first time that corn has strung back to back higher closes together in almost 3 weeks. It is doubtful however that we can pull much away from a $.03 higher move over a 2 day span. The markets seem to be biding their time until the September S&D report comes out on Friday morning. The main corn news of the day was a wire story indicating that farmer’s in Argentina are expecting to plant 24 percent less land to corn this year; this is after last year also saw a significant reduction in planted area. The BA grain exchange is expecting 1.875 million hectares this year compared to 2.46 million two years ago. U.S. weather stills looks favorable with average to above average temperatures forecast for the next two weeks. Hopefully this will help crops catch up a bit to normal.

Soybeans slid lower today as the Chinese demand of last week has been absent this week. It should still be noted that the size of the business already done to China for the next marketing year is still very impressive. We need to get other destinations involved again to help put some support under new crop basis values again. Increased harvest activity in the southern U.S. has helped to supply the cash market and has helped bring cash levels back down to a modest premium to new crop values. We still see old crop basis levels as being strong at the processor level so if you have old crop beans we would encourage you to give us a call for ideas on what to do with these bushels.

Thanks, Phil Farrell

Tuesday September 8th, 2009

A 3 day Labor Day weekend gave the grain markets no different direction as the weather forecast for the next 10 days remains above average and no threat of frost. Extended forecasts are calling for below normal temps starting Sept 18th with several areas in Minnesota and Wisconsin down in the mid 30's but again no threat of damaging frost to the corn belt. The corn and soybean market bounced off overnight lows to finish 1 and 14 cents higher respectively. The biggest support for both corn and soybeans came from the slumping US Dollar and $3.33 higher crude. Old crop corn and bean basis levels continue to fade by the week into the lower new crop levels but there could still be one more old crop push before harvest really makes its way up here.

Crop Progress out this afternoon:
Corn Mature 8% TW, vs 5% LW vs 10% LY and 23% avg
Corn Dented 50% TW, vs 32% LW vs 59% LY and 75% avg
Soybeans dropping leaves 7% TW vs 3% LW vs 9% LY and 18% avg

Scott Meyer

Grain futures fell sharply across the board today. December corn lost 9 1/2 cents and November soybeans lost 19 1/2 cents. Though the 8-14 day NWS outlook calls for below normal temperatures, no serious threat of frost is seen on the horizon. Start of harvest in the south with reports of good yields also pressured prices. Soybean basis continued to drop as processors and exporters declined to pay up for limited old crop supplies with new crop on the way.

Last week Illinois Governor Pat Quinn signed the Intermodal Facilities Promotion Act. This act encourages business development in several industries, including food production, along freight rail lines in the state of Illinois. As a starting point, a public-private partnership with CenterPoint Properties is established to build an intermodal terminal near Joliet. This terminal is to be operated by the Union Pacific Railroad. This could have an effect on our local grain markets if more containers become available for grain loading in our area.

US national average diesel fuel prices rose modestly in this week's DOE report making the 6th consectutive week that the national average price has gone up. Average on-highway diesel price is up about 7% over that period. Still well below year ago levels. As Zach pointed out last night, increased distillate stocks reported this week and crude oil trading lower should help put an end to this streak.

Have a great Labor Day weekend!
Go ILLINI!

Mike Etienne

9/3/2009

Hello Elburn Coop Blog Users. By way of introduction, my name is Zach Winter. I am the Elburn Cooperative petroleum sales and marketing manager. I come to Elburn Coop with a diverse sales background and a formal education from Illinois State University. It is said that the average adult attention span is about twelve minutes when listening and about six sentences when reading. Hopefully your still here. I would like to talk about the Energy Market. For all practical purposes we will focus on the three key areas which makeup the Energy Market: Distillate, Gasoline, and Crude Oil. While each commodity is directly related in the manufacturing process, they are independently traded daily.
Distillate:
The short term outlook appears to be bearish with consistent loses all week. The Department of Energy reported Wednesday a 1.2 million bpd build in Distillate. The news created a massive sell off, edging close to the 2009 single day record loses of $.11. Demand was reported down 7.3% from last year, with this weeks savings it is not a bad weekend to fill the truck.
Gasoline:
The short term outlook for gasoline is slightly bullish with consistent gains over the past few trading sessions. On Wednesday the DOE report gave a bounce to the gas market by reporting 3 million bpd draw. Overall demand is up half of one percent from last year. Expect to pay a little more for gasoline as we head into the holiday weekend.
Crude Oil:
The short term outlook is slightly bearish. The market appears to be looking for direction as the last two days of trading have produced a total close volatility of nine cents. Crude closed at $67.96 today, as the week closes look for crude to test the July low of $65.25.

Wednesday September 2, 2009

Corn closed mostly unchanged across the board amid pressure from a large crop expectations and some mild short covering of traders. Prices had been lower for much of the session, but finished unchanged as mid day weather forecast put cooler temperatures back into the forecast. FC Stones higher yield estimate out yesterday at 162.7 bu/ac on corn helped to keep the market at bay today.

Much of the same story on the bean market today as well, as the talk of a large crop has seen a modest sell off this week in beans. Old bean stocks continue to remain tight though as processors struggle to find beans, amid a very thin supply.

Chris Spurlock

Tuesday September 1st, 2009

Both corn and soybeans continue to see downside pressure in the market today as weather and outside markets continue to weigh down on them. Corn dropped over a dime today as the weather forecast continues to show good conditions in the upcoming week along with pressure from the soybean market, and crude oil down over $2 a barrel. FC Stone was out tonight with their updated acreage number which has corn pegged at 162.7 bu/ac and soybeans at 42.6 bu/ac. The USDA pegged corn and soybeans in their August report at 162.7 bu/ac and 41.7 bu/ac respectively.

The soybean market plunged 3 percent on Monday because traders were spooked by prospects that state-owned Chinese companies may be allowed to walk away from money-losing commodity derivative trades, although Chinese officials did comment that it won't affect oil or grain trades.

Chris Spurlock

Monday August 31st, 2009

Crop progress out this afternoon.

Corn 69% G/E vs 70% last week and 61% last year
Beans 69% G/E vs 69% lw and 57% ly
Corn Dough 75% vs 57% lw and 88% avg
Corn Dented 32% vs 18% lw and 60% avg

Sep corn gained 5 cents on Dec as spreads work to procure old crop grain for processors and ethanol plants.

Choppy trade expected until September 11th prodution estimate report and monthly supply and demand outlook.

Scott Meyer

Friday August 28th, 2009

Corn wound up lower on Friday as a lack of news and mixed outside markets left traders without much clear direction. So far the frost threat has helped to keep prices anchored, with the weekend forecast showing near record low temperatures moving over much of the corn belt this weekend.

Soybeans continued their climb upward as the November contract closed 15 cents higher on the day. Soybeans continue to find strength as the pipeline searches for supplies amid a very tight old crop supply, as well as how this weather will finish out the crop, and what effect it will have the potential yield.

Crude oil ended up slightly in choppy trading on Friday, after a downbeat consumer confidence report dented demand recovery hopes and offset higher consumer spending. Talk of crude futures prices being locked in range, with the top end at $75, and low end of $65.

Have a good weekend!
Chris Spurlock