For those hauling grain toward Ottawa, please note the Illinois DOT has placed a 15 ton weight restriction on the bridge that carries Illinois 23 over Buck Creek, 3 miles north of Ottawa. Deterioration of the steel superstructure was listed as the reason and they stated emergency repairs will be made to remove the posting as soon as possible.

On highway diesel fuel prices dropped slightly in this week’s report ending a six week run of increases. Strong distillate stocks and crude oil trading lower today should help keep diesel prices in check for the near term.

USDA stocks and production reports today showed record yields in corn are expected with the total US crop expected to be the 2nd largest on record. Interestingly, the Illinois yield is now expected to equal last year’s at 179 bu/ac. Corn futures were supported late after spending most of the day in the red. Dec corn finishing 4 ½ higher. Though the production is expected to be higher, feed usage and exports for next year were increased to net a smaller than expected increase in carryout next year. Soybean production is expected to be a record this year. Soybeans spent most of the day under pressure. Nov soybean futures closed down 23 ½ .

Have a great weekend!
Mike Etienne

USDA Report Flash September 11 8:45 am

Corn
Market expecting a record US yield on corn and we got it. 161.9 bpa vs 159.5 last month. This puts production up 193 mbu but we will carry in 35 mbu less from the old crop due to better old crop demand. New crop usage also up 50 mbu on feed, up 100 mbu exports, ethanol unchanged. So… 164 mbu higher supply, 150 more usage, adds 14 mbu to carryout netting 1.635 bbu. The market was expecting something approaching 2 bbu. So, maybe this bearish report isn’t quite so bearish.

Beans
Old carry in is unchanged at 110 mbu. Production up 46 mbu due to 6/10ths of a bu increase in yield to 42.3 bu/acre. Usage up 35 mbu: 20 on crush, up 15 on exports. Net new-crop carryout up 10 mbut to 220 mbu.

Globally, world coarse grain ending stocks are up on old crop 1.5 mmt, but down for 09/10 1.6 mmt. Little bullish World bean stocks of .8 mmt old, and up .2 mmt for 09/10. Neutral

Sell the rumor buy the fact? Calls are firming up, maybe higher?

September 10, 2009

A week in review, The Energy Market. The much anticipated OPEC meeting turned out to be nothing more than a nice vacation for attendees. Early week press releases indicated production would be kept as status quo and they did not disappoint. It appears OPEC is happy with 65-75 dollar crude. One thing to keep an eye on is OPEC compliance. Countries like Iran and Angola have had trouble in the past holding to the daily limits, OPEC is reporting compliance has fallen from about 80% to 70%. Apparently its hard for some to stop milking the cash cow. The Department of Energy weekly report is in and no fireworks have been spotted. While the news is note worthy, the market has yet to digest what the report means. The crude inventory numbers read bullish, with a draw of about 5.9 million bpd, but the 2 million bpd build in both gasoline and distillates could slow the market. A hopeful outlook could be a jump in crude prices causing other commodities to gain momentum, all the while a tapping of the breaks on the diesel product that goes in the tractor. Breakdown:
Distillate
The short term out look is slightly bearish. With a 2 million bpd build and demand over the past four weeks down 5.6% from last year, there is still room for down side in the market.
Gasoline
Gasoline inventories came in slightly higher at 2.1 million bpd sending the market down about .02 cents throughout the day. Like diesel, gasoline demand is down over the four week spread from last year by about 2.2%. I wouldn't look for much change until next weeks early API inventories are reported.
Crude
The short term looks bullish. With draws near 5.9 million bpd, the only thing that could slow the market will be the large builds in product and a strengthen in the dollar. As for now the market seems content to trade crude in the 70-75 dollar range. We closed under $72, but watch for overnight trade to test mid $70's.

Do not forget this weekend is Sandwich Fair, take the kids out and get a corndog.

Zach Winter

Wednesday, September 9, 2009

Corn had another choppy day of trade with a relatively tight range ending a couple pennies higher; this is the first time that corn has strung back to back higher closes together in almost 3 weeks. It is doubtful however that we can pull much away from a $.03 higher move over a 2 day span. The markets seem to be biding their time until the September S&D report comes out on Friday morning. The main corn news of the day was a wire story indicating that farmer’s in Argentina are expecting to plant 24 percent less land to corn this year; this is after last year also saw a significant reduction in planted area. The BA grain exchange is expecting 1.875 million hectares this year compared to 2.46 million two years ago. U.S. weather stills looks favorable with average to above average temperatures forecast for the next two weeks. Hopefully this will help crops catch up a bit to normal.

Soybeans slid lower today as the Chinese demand of last week has been absent this week. It should still be noted that the size of the business already done to China for the next marketing year is still very impressive. We need to get other destinations involved again to help put some support under new crop basis values again. Increased harvest activity in the southern U.S. has helped to supply the cash market and has helped bring cash levels back down to a modest premium to new crop values. We still see old crop basis levels as being strong at the processor level so if you have old crop beans we would encourage you to give us a call for ideas on what to do with these bushels.

Thanks, Phil Farrell

Tuesday September 8th, 2009

A 3 day Labor Day weekend gave the grain markets no different direction as the weather forecast for the next 10 days remains above average and no threat of frost. Extended forecasts are calling for below normal temps starting Sept 18th with several areas in Minnesota and Wisconsin down in the mid 30's but again no threat of damaging frost to the corn belt. The corn and soybean market bounced off overnight lows to finish 1 and 14 cents higher respectively. The biggest support for both corn and soybeans came from the slumping US Dollar and $3.33 higher crude. Old crop corn and bean basis levels continue to fade by the week into the lower new crop levels but there could still be one more old crop push before harvest really makes its way up here.

Crop Progress out this afternoon:
Corn Mature 8% TW, vs 5% LW vs 10% LY and 23% avg
Corn Dented 50% TW, vs 32% LW vs 59% LY and 75% avg
Soybeans dropping leaves 7% TW vs 3% LW vs 9% LY and 18% avg

Scott Meyer