Monday June 1, 2009

The recent steep decline in the dollar is generating uneasiness regarding the state of the US currency and the huge debt loads being taken on by the Federal Government.This in turn is reversing the "flight to quality" mentality of late 2008 and early 2009 that originally pushed the dollar sharply higher. Now it seems like the large traders and investors are looking for a new "safe" place to to park some money, and commodities seem to be an obvious choice.Today's rally has clearly came in the lower directionally based dollar with a major assist coming from $2 a barrel higher crude oil prices.
Futures in corn beans and wheat were all higher today with corn being up 9-10 cents
beans new crop up 24 and old crop July up 34, followed by the wheat up 32-37 cents on the day. Winter wheat condition isn't much different than last week pegged at 45% good to excellent. Spring wheat is 89% planted compared to 98% average and 67% emerged compared to 90% average. The spring wheat is 73% good to excellent compared to 57% last year.
Crop planting progress was about as expected with 93% of the corn planted compared to an average of 97%. 73% of the corn was emerged compared to 86% average. USDA also released its first crop conditions rating pegging the corn crop at 70% good to excellent.The crop progress on was 66% planted compared to an average of 79% with the emergence at 36% versus 30% last year and 51% average.

Chuck Peterson