Corn and bean futures closed mixed today ahead of another weather weekend in South America. For the week corn was virtually unchanged with soybeans losing $.11 despite what many report as significant drought conditions in parts of Argentina. The combination of a strong US dollar, weaker crude prices and US and world equity market weakness has largely offset dry forecasts, leading to the stalemate experienced this week.
The weekly export sales report provided friendly input for corn today at 42.7 million bushels. This was better than expected and easily surpassed the four week average of 10 million bushels. Corn sales year to date of 890 million bushels are about half of last years levels and we still have challenges to meet the USDA 1.75 billion forecast. We are really seeing the effects of increased foreign corn and wheat production. Maybe this week is the start of demand coming back to U.S. corn as competing feed source alternatives start to dwindle? The increased export demand has helped support local basis levels for March delivery at the river at are starting to get somewhat respectable. The weekly soybean sales report was also strong at 48.7 million bushels putting us at 79% of the current USDA forecast for the year.
Next week the prevalant market issue looks to be the drought situation in Argentina, in particular as continued drought there will certainly lead to reduced corn and soybean crop estimates.
Have a good weekend,
Phil Farrell
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