Friday, September 25, 2009

For those hauling grain to Ottawa, the 15 ton weight limit continues to be in place on the IL 23 bridge over Buck Creek just north of Ottawa. This issue will likely be with us for several weeks if not months. IDOT engineers are currently working on plans to repair the bridge but, it will take some time.

Corn futures were slightly lower, soybeans a little higher and wheat sharply lower in today’s trading. Dec corn finished down 2 ½ cents today but, was 16 cents higher for the week. Nov soybeans finished 6 ½ cents higher today but, down 15 cents since last Friday’s close. Dec Chicago wheat futures finished 23 ¼ cents lower as continued talk of CFTC’s recommendation to implement variable storage rates and plentiful world supplies pressured prices.

On highway diesel fuel prices dropped a little more than a cent for the third week in a row. Continued relatively strong supplies of crude oil and petroleum products against weak demand should continue to hold prices in check. Crude oil traded substantially lower this week.

Have a great weekend!
Mike Etienne

Thursday September 24, 2009

The Energy Coaster by Zach Winter. Crude futures settled at $65.89 today, the lowest settlement since July 29th when sellers managed to push the value as low as $63.35. Crude lost just over three dollars on the day right at four percent additional loss on top of the Wednesday settle. Sellers were active from the get go and gained momentum following the latest report detailing home sales continue a weak sales cycle and reawakened worry over economic recovery. The dollar added support to the downward plunge as it gained against the euro. Heating oil or Distillate as we have talked in the past has hit an eight week low of $1.6814 and gasoline/ RBOB hit four month lows of $1.636. The short term outlook still remains bearish unless today’s market activity is over analyzed. This weeks DOE report provided the beginning of the downward direction with builds on all product. It was expected that we would once again have a draw on crude with low imports being reported, but as it turned out demand was weak enough to post builds across the board. As it stands crude stocks are at 335.6 million bbl, an annual increase of 32.2 million over last year. Similarly product reflects the same story, with builds in Distillate at 40.8 million bbl and Gasoline at 20.6 bbl. Watch the trend of the dollar to find tomorrows direction, but keep in mind the sideways trend of $65 to $75 crude. We are still in the range to maintain what we have seen over the past couple of months. This could be a great buying opportunity on the product side; multi month lows are just that.
Thanks for reading.
Zach Winter

Wednesday, September 23, 2009

Wednesday, September 23, 2009

Corn closed $.04 higher today with December futures trading in an $.18 range. The overnight markets were weak with outside crude oil and gold lower and some forecasters moderating the potential for frost. Some of the noon weather models today put the potential for frost as far south as Northwestern Illinois and Southeast Iowa with the potential for patchy frost into central Illinois. This was enough to allow corn to rally despite the weaker influences from beans, crude oil, etc. There seems to be some other factors at work on the corn market as well with many analyst seeming to take the top end off of the yield discussions for reasons other than frost such as early results from Central Illinois showing field damage. It is too early to tell if these influences will continue because there still seems to be a lot of corn to be harvested and find a use for. Either way today and yesterday were certainly days where traders took profits on short positions in corn to evaluate crop potential.

The bean market doesn't seem to be as concerned as corn about crop prospects with bean maturity further along and early yield results promising. Beans were lower most of the day, closing down a penny or two but certainly have not had the interest from buyers that corn has had. Part of the bean price issue may be due to longer term ideas that South America will have a record bean harvest with Argentina coming out of a drought reduced 2009 crop and Brazil increasing bean acres. The bean market is setting up to have record export demand for the first half of the year before South American supplies take over the world market. This could lead to a situation where cash bean basis levels for December - February could be the best opportunities to move beans into the market. Beans delivered to our Morris elevator for December and January are currently $.135 over the January futures contract, this is probably the best these values have ever been this far in advance.

Phil Farrell

Tuesday, September 22, 2009

Tuesday September 22th, 2009

Another Tuesday and another frost alert. Today's forecast for freezing temperatures Sept 28-29 were not as dramatic as that of a week ago but never the less shows damaging frost as far south as Northern Iowa and Northern Illinois. Corn rallied 10 cents on short covering along with the outside markets flip floping yesterday's trade with crude up nearly $2, stock market up 51 pts to 9829, and the dollar losing to every other currency.

Funds were noted buyers of 10,000 contracts of corn vs the nearly 40,000 last week they bought on the frost concerns. Soybeans maturing fast should limit yield lost in late September but yield and quality concerns could arise in corn.

Early yield reports have been impressive with corn and bean yields in Tennesse, Kentucky, Missouri, and Ohio showing the best gains over last year and 5 year averages.

Scott Meyer

Monday, September 21, 2009

Monday September 21, 2009

Maturity of U.S. corn improved during the latest week but remains well behind the average due to a wet spring, according to the crop progress report. USDA said the corn crop was 21 percent mature, up from 12 percent last week but off the five-year average of 55 percent. Soybeans dropping leaves, a sign of maturity for the crop, was higher at 40 percent, an increase from 17 percent last week.

The dollar hit a near two-week high against the yen on speculation the U.S. Federal Reserve will announce "they're going to start removing stimulus" measures. Oil prices dived 3 percent on Monday after the dollar rebounded and soybeans fell as much on fears of a big crop, combining in a broad commodities sell-off.

Traders note that the GFS model still is calling for a light frost/freeze in the northern Dakotas/MN toward the 1st weekend in October but other private forecasters are dismissing this model. They believe that the GFS model is wrong and no frost will occur. Even if frost does occur the 1st week in October, the market believes it will cause more of a problem on quality than it will with quantity (with the exception in North Dakota where it will do both).

Chris Spurlock