February 13, 2009

Corn futures closed slightly lower ahead of a long weekend. December corn lost $.16 for the week, the seventh consecutive week with lower Friday closes. The market appears to be less concerned with South American weather and is more focused on finding a price to generate demand. The export market has certainly perked up due to the lower prices of corn and transportation. This week marks the fourth week in a row of 40+ million bushel sold with this weeks 60.8 million a marketing year high. Sales year to date are still well behind a year ago but at 1.040 billion bushel sold we are catching up somewhat and is giving us hope that we can achieve the USDA 1.75 billion bushel estimate for the year. The strong export sales and deteriorating futures prices continue to support basis with delivered river values very near the +0 level.

Soybean futures settled lower with improved Argentina weather and the continued weak economic climate the main influences. The export market continues strong with 937 million bushels sold for the marketing year to date, 82% of the 1.050 billion yearly forecast by USDA. The bean export sales totals are impressive with Chinese demand the reason, they bought another 116,000 ton today and 200,000 more was announced as sold to unknown destinations, likely China as well. The cash bean situation is much like corn, STRONG basis continues at all locations, river, processor and container markets. This looks to be a good time, depending on road conditions, to move cash beans either through Basis or even Delay Price alternatives. We have seen a large amount of this type of grain moving both corn and soybeans. Another way to take advantage of the strong basis is to sell the cash grain and replace with a minimum price contract. The added benefit of this contract is it also locks in a floor price on the grain.

Have a great weekend, Phil Farrell