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

March 5th, 2009

Corn exports this morning came in at 31.2 million bu -just above expectations, soybean sales were at 5.7 mbu - below the 15-26 expected, and all wheat came in at 10.5 mbu with 13-17 expected. Crude oil dn $1.77 today and the Dow Jones down 270 points at 6600 at time of writing. Harvest is rolling along in Brazil with adequate yields being reported. Soybean demand is concentrated to China as they continue to build stocks to fight food inflation. Corn and soybean basis were again firmer as the board of trade was lower, there seems to be a pattern to that forming.

Oil industry insiders and traders see OPEC continuing to cut production with some 80% of members abiding to agreements on cutting production.

Funds 03/05/09
sold 3000 contracts corn - position now long 6000
sold 3000 contracts of soybeans - position now long 11,000
sold 3000 winter wheat - position now short 19,000

Scott Meyer

Wednesday March 4, 2009

Today the grains closed modestly higher in Chicago with May Corn up 13 and near the high, with May Soybeans also up 15. Although we had some supportive news the grains seem to be following outside markets. The Dow Jones closing up 149 pts and Crude oil closing up $3.55/barrel.
Corn closed higher and is trying to take a sideways short term stance to insure that acres end comfortably. Though, with recent price action in comparison to soybeans seems as if corn is a good sized premium now. Seasonal tendencies are to rally corn in March though we are caught in the biggest debacle of recent history in the financial sector. Technically, speaking corn is still trapped in a long term downtrend though fighting to challenge its way out. The downtrend line drawn off summer highs comes in at 3.96 basis December futures followed by the 20 day moving average offering resistance at 4.00 basis December futures.
Soybeans closed higher following mixed signals from mainly fundamental sources. The soybean market is trying to discourage new crop acres while balancing a potential Argentina strike and rumors of China buying 3 cargoes of old crop soybeans. I personally feel that the soybean market has discounted the new crop acreage intentions a bit too far this early in the year. Seems as if the Nitrogen market is giving us a few signs that acres are moving into corn as we speak especially locally.

Up coming news:
USDA Export Sales 7:30am Thursday expectations as follows:
450-750MT Corn
400-700MT Soybeans

Jeff Neisler

March 3rd, 2009

Time to play catch up after missing the Monday night comments. Illinois grain yields out yesterday afternoon that will affect county insurance policies and payments. Below are the local yields and state yields at the bottom:

County Corn Bean
Lee 182 46
Kane 188 44
DeKalb 189 48
Kendall 176 47
Ogle 184 45
McHenry 158 39

Illinois 179 47

March 31 USDA report for planting intentions will be the next big report out with private companies starting to release their expectations toward the middle of the month. Corn and Soybean basis continues to stay impressively strong due to the lower cash prices.

The Argentina farmer and government are negotiating the export tax on soybeans as farmers still have 3 mmt more old crop soybeans than they did at this time last year. Traders and other countries are fearful that nothing will get resolved and when the Argentina harvest hits in full stride soon, there will be another yearly strike to disrupt the export market down there.

Scott Meyer