March 6, 2009

After another dismal week in grains with May Corn futures closed the week out 2.5 cents higher and May Soybean futures lost 5 cents. Corn appeared to be a market follower during the session on spillover strength from higher beans as well as firmer wheat futures. The commodities found support from a weaker U.S. dollar as well as firmer crude oil. Slow farmer selling in combination with firm basis levels was seen as supportive sparking some speculative short-covering. A lack of fresh fundamental news kept the commodities attention focused on the outside markets for direction.

Several traders are also starting to wonder whether the commodities markets are starting to disconnect themselves from the equities markets as corn saw a 2.5 cent gain for the week and beans only lost 5 cents, while the NYSE has posted around a 600 point loss for the week. The corn market also saw impressive export sales again this week, although 40% behind last years numbers. However, several analyst believe that there could be a pick up in exports for corn as the Argentina drought will force buyers to come to the U.S. for their needs.

Informa Economics (formerly Sparks) will resurvey acreage later next week. Informa’s last estimate projecting US corn acreage down near 3.3 million acres from a year ago. Trade fearing a possible substantial reduction in US corn plantings with high input costs, lack of credit and desire to return to more normal crop rotation patterns. Some now see corn values staging a small rally into March 31 acreage report.

~Have a Good Weekend, Chris Spurlock