Friday, May 15, 2009

Friday May 15th, 2009

Profit taking and technical selling were the name of the game today amid bullish nearby weather. For the week, new crop corn ended down 1.5 cents even with a bullish USDA report Tuesday and continuing bad planting weather. New crop soybeans were down 3.5 cents for the week. Traders continue to look at the favorable extended forecast and that as of the planting intentions report due out next Monday, 60-65% of the nation's corn will be planted. Crude also contributed to today's lower prices as it settled $2.00 lower at $56.50 due to poor economic reports.

Corn basis took a hit this week with lots of producer selling into the rally during the middle of the week. China continues to buy old crop beans and that has kept the bean basis strong and nearby futures closed at $11.305 which was up 19 cents for the week. The excess rain has also caused problems on the Illinois River as water levels are too high to load barges.

Weather will be the dominant player over the weekend and should influence the Sunday night trade if the forecast changes to the wet side.

Scott Meyer

Thursday, May 14, 2009

Thursday May 14,2009

Soybeans closed higher and near seession highs.Talk of new China soybean import interest and good weekly U.S. soybean and soy meal export sales,helped nearby soybean and soy meal futures make new highs for the move. July soybeans were up 191/2 and November beans were up 10 1/2. There are some that feel that current soybean demand pace could suggest final demand may deplete our carryout farther forcing July beans to test the 12.00-12.50 area
Corn futures closed higher and near session highs,the volume was light and the trade was trying to find a price that reflects late planting in the east and one of the best starts ever in the western corn belt.The traders have been cautious and will continue to be cautious because profit taking and increased farmer selling has been the dominant feature of the week. The corn market has risen more than 70 cents in less than 3 weeks without a significant correction. I guess I am trying to say seller beware.

Chuck Peterson

Wednesday, May 13, 2009

Wednesday May 13, 2008

Today Grains closed mixed in Chicago as July Corn closed -1, December Corn -3/4, July Soybeans +10 1/2, and November Soybeans +2.

In the corn market, many things are at work. The USDA Supply and Demand Report on its own was bullish new crop corn as stocks to use levels are near 10%. First and foremost, the market is trying to balance planting delays in the east with what seems to be near on par in the west especially as corn tries to rally and the westerners sell cash against it. Secondly, an inability for much of the domestic demand especially from the feed sector to follow this market higher after being crippled by an extreme rally over the past few years. Third,stopping any major livestock rally is the consumer's inability to pay up for packaged meat on the shelf. Fourth, a strong bearish wheat seasonal that tends to play out in mid to late May.

In the soybean market rumors circulating about China buying 1-2 more cargoes of old crop soybeans from the U.S. Many are suggesting that the USDA continues to overestimate US carryout at 130. That by the time harvest arrives and early new crop soybeans are available we will be down to pipeline minimum. This suggesting continued need for old crop soybean premiums. As far as new crop soybeans, a 230 bushel carryout is comfortable yet not burdensome. Is the market sourcing new crop soybean acres away from corn?? I believe it is, as weather patterns are not conducive to corn planting progress. Although, many believe that it is not the United States that can balance the world supply and demand for soybeans it is South America. Thus the need for new crop soybeans to buy acres there in a longer term play is key.

Jeff Neisler

Tuesday, May 12, 2009

Tuesday May 12th, 2009

USDA Report out this morning that fed the bulls in the corn pit. The 08/09 corn carryout was lowered from 1.7 bil in April to 1.6 as the USDA added back some exports and ethanol that they took away earlier in the year. The 09/2010 carryout is pegged at 1.145 billion and that is using 85 million acres at 155 bu/ac. Both the acres and yield may seem to be on the strong side given wet conditions in the entire eastern corn belt. December 2009 corn did reach levels not seen since Jan 20th as the extended carryout slides down to near 1.0 billion bushels.

Soybean USDA Report was as expected with 08/09 bean carryout at 130 million bushels vs the April 165 as China continued to buy our beans due to a lack of availability in Argentina. The 09/2010 carryout still looks comfortable at 230 million bushels but weather and delayed planting could eventually affect that situation. Beans were up a penny old crop and down 3 new crop and seem comfortable at $11 and $9 respectively.

Large amounts of rain forecast for the next 36 hours over the entire corn belt which should provide support for the balance of the week.

Scott Meyer

Monday, May 11, 2009

Monday May 11th, 2009

Profit taking Monday in front of the monthly USDA report scheduled to be released Tuesday morning allowed for a choppy season. Wet conditions in the eastern corn belt continue to hamper plantings as the crop progress report showed U.S. corn plantings at only 48% vs. last weeks plantings of 33% and the 5-year average of 71%. Both Illinois and Indiana are barely planted with only 10% and 11% completed respectively. To put this in perspective, 2.6 million acres of have been planted in IL, IN, and OH vs. the 5-year average pace which would have been 16.5 million acres planted by now.

U.S. soybean planting is just 14% complete vs. 6% last week and 25% average. Again, the western belt is seeing no problem for the most part, whil the central/eastern states are extremely slow.

~Chris Spurlock