February 25, 2009

An end to February Break? Planting Rally?
Today corn closed 9 higher and soybeans 3 lower.
In the corn market traders are moving to attempt to insure new crop corn acres away from soybeans. Most traders are looking for up to 2 million acre drop in corn and a 4 million acre addition to soybeans. Corn over the past week displaying some buoyancy shaking off lower movement. It does appear at this point in time that we are poised to potentially rally the corn market. Today we challenged the downtrend line drawn off summer highs along with the 20 day moving average along with establishing a fresh one week high on May Corn at 3.77 3/4. A close this week above 3.80 basis May futures would build confidence that the break is behind us.
In the soybean complex, especially tied to the crude oil market where some support is showing up around the $40/barrel area potentially suggesting that we are near a low in crude. This supporting especially soybean oil futures where the funds have been quietly buying over the past week.
An item of note, President Obama stating that he would like to cut farm subsidies. Hinting that potentially drawing an end to Direct Payments by 2011.
Up Coming News:
7:30am Thursday Export Sales estimates as follows:
Corn 750-950 mt
Soybeans 550-850 mt
Jeff Neisler