Wednesday, August 19, 2009

The corn market put in a rally today closing $.05 higher led by a strong Crude Oil rally as diesel and gas usage were reported stronger than expected for the past week. The corn market did get some negative news today as the CFTC announced that they will withdraw position limit extensions to the two largest index funds and is basically giving them until October or early November to reduce part of their long futures positions, considering that the index funds hold 25% of the long open interest in corn this could lend to some liquidation down the road. Other news seems to be pretty scarce with the Pro Farmer crop tour reporting what is expected, crop potential in Illinois is below a year ago while potential in Iowa is better than a year ago.

The bean market was erratic today with values up $.07 at one point overnight, $.13 lower during the day and closing $.01 lower. There was another export sale reported to China today but that seems to be expected by the market at this point as they continue to get coverage well into the new year. Export sales are expected to be very strong on beans tomorrow as last weeks strong sales to China will be reported. In general we would expect to see export sales for new crop to continue strong for the near future with South American supplies at record small levels for this time of year.

I read an interesting comment on the Gartman report today: The top 1% of US income
earners pay 38.4% of the nations taxes. Top 5% pay 58.8% of the nations taxes. Top 10% pay 69.7% of the nations taxes. Top 25% paid 85.6% of the nations taxes. Top 50% paid 96.8% of the nations taxes. The bottom 50% of US income earners that file tax returns pay 3.2% of the nations total taxes.

Phil Farrell