Wednesday, January 13, 2010

The corn market further explored the downside today. The market did begin to stabilize after the open however and finished 15 cents off the lows for the day. The new crop months actually managed to close higher with December up $.01 while old crop March corn was 8.5 cents lower at $3.84. For much of the session, the USDA report continued to exert a negative influence. This was especially true as there was a lack of any other fresh fundamental news. However, as corn started to stem the slide, end users stepped up to buy the break with livestock feeders and ethanol plants likely taking the opportunity to lock in some nearby needs as the producer continues to sit on the sideline and ponder how to handle the 40 cent break. Also helping to rally the corn market back was the perception that the index funds would buy the close in big numbers and indeed corn did rally 5 cents in the last 15 minutes.

The soybeans were the best performer throughout today’s session. Once they weathered the storm of 20+ cent losses in the corn and $2.00+ losses in the crude oil, they were able to post gains for the day with 14 cents better at $9.92. Nearly half of yesterday’s losses were recovered. The USDA report did help to influence the market today with the best support coming from the increased U.S. export forecast which now stands at a record 1.375 billion bushels. From a production standpoint traders will focus on South America where the weather forecast seems to be ideal with recent rains to be followed by 5 days of dry weather.

Phil