February 6th, 2009

Basis appreciation was the name of the game this week. Nearly all corn and soybean basis bids were stronger this week as the lack of new cash sales coupled with the bump in corn exports created a thin pipeline. Nearby Illinois river corn went from -.23 basis to -.08 as Illinois river bean based improved from -.13 to -.04. The futures market was down hard earlier in the week only to rebound going into the weekend. For the week nearby March 09 corn was down 2 cents and nearby March 09 soybeans posted a gain of 20 cents. South American weather will be closely watched as many see a need for more moisture next week after somewhat disappointing amounts this week. The USDA outlook report along with the SA weather should provide direction next week in the futures market. Enjoy the warmer temperatures.

Scott Meyer

February 5, 2009

CBOT grain futures saw a rally on Thursday with soybeans finishing up 30 1/2 cents and corn closing up 13 cents. Lingering crop concerns in South America remain the underlying driving force as the crop continues to deteriorate in Argentina and Brazil and current extended weather forecast call for warmer/drier weather. Export sales out on Thursday showed corn at 47.8 million bushels for the week and soybeans at 12.5 million bushels. Though export demand was not overly bullish for corn it does suggest that corn is at least competitive at current prices. Analyst expectations had been between 30 - 37 million bushels for corn and 17 - 24 million bushels for soybeans. Thursday also saw a modest increase in the U.S. Dollar index, along with slightly higher crude and gold prices. Ethanol margins have began to improve recently and analysts are starting to discuss rising freight rates, which could signal rising commodity demand.

Chris Spurlock

February 4, 2009

The seasonal February break is upon us. This began with rain in some of the dry areas of South America over the weekend.

In the corn market, last Friday the USDA released their cattle on feed report reinforcing the demand destruction that existed at higher values. The report showed that domestically cattle on feed is at the lowest level since 1959. Ethanol plants struggling to stay afloat and exports lagging the USDA goals. All of this leading to selling prior to USDA Supply and Demand Report next Tuesday. Longer term, seems as if this corn market is headed to over 2 billion bushel carryout.

The soybean market is definitely the leader in Chicago. We left January's trading range behind on Monday. This generating sell stops underneath 9.60 March Futures. The soybean market is finding some mild support at the 40 day moving average at 9.44 today. From a technical standpoint there lies little support below that until 8.80-8.90 area. Tomorrow's export sales data will be closely watched to see if their are any changes in Chinese demand.

On the bright side of the equation nearby basis levels are firming and should be rewarded.

Up and coming news:
USDA Export Sales 7:30am Thursday
trade estimates as follows:
corn 30-37 mbu
soybeans 17-24 mbu

USDA Supply and Demand Tuesday February 10th at 7:30am

Jeff Neisler

February 3, 2009

February certainly is not starting out very well as both corn and beans were lower again in response to active rains in Argentina and Southern Brazil. Many analyst now see soybean crop potential stabilizing with the South American crop now estimated down around 290 million bushels from early December estimates. Current world carryout estimates suggest that we could sustain a 440 million bushel reduction in soybean production before supplies get overly tight.

The corn market seemed to follow soybeans lower at the open. Market losses were extended on thoughts that we are continuing to see decreased demand from all sources; export, feed and ethanol. A major ethanol producer today released an estimate suggesting that 2.7 billion gallons of ethanol capacity is currently idle with more likely. A 101 million gallon plant located in Pekin, IL announced today that it is halting production immediately will obviously add to the total.

On a positive note, basis levels for corn and beans delivered to many local markets are at the best levels of the year with slow producer movement leading to a tight pipeline. Check out current levels at various delivery points on our bid sheet and give us a call.

Thanks, Phil Farrell

February 2, 2009

Somewhat of a gloomy start to a week that the groundhog has predicted we will have 6 more weeks of winter. The grains all started lower on the day and never really looked back. The outside markets influence was negative with the Dow and the S&P all trading lower on the day. We also saw the dollar trade higher and crude oil down over 1.50 a barrel. February is insurance pricing month, so I feel the market will be cautious to any large breaks or upside swings in regards to the upcoming March plantings intentions report. Soybeans continue to lead the grains in exports as the bean export inspection report came in at 33.5 million bushels, which was above the 14.1 million bushels needs this week to meet the USDA's projection of 1.1 billion bushels. Corn and wheat export inspections came in as a disappointment with corn 10 million bushels down from what was needed and wheat down 3 million bushels. The good thing on the day was the increased buying in both the corn and soybeans by the commercials as they apparently needed to buy for inventory. This market still is in a range with all technical supports holding.

Chuck Peterson