Friday, March 26, 2010

Friday March 26, 2010

Happy Friday y'all! It's on this day actor James Caan (1940), Aerosmith front man Steven Tyler (1948), and NBA player John Stockton (1962) were born.

It was refreshing to see the markets close on a positive note after yesterday's sub-par performance. Yesterday the US dollar was stronger and commodities weaker. Today the US dollar was weaker and commodities stronger. Nearby soybeans closed UP 9 cents at $9.52. Corn closed UP 1 cent on the day at $3.56. The US dollar is down as crude oil nears the $81.00 mark. The Euro is up on the day as well.

Limited AG news lead to the greenback settling the markets tone for the day.

China will ship 540,000 tons of corn and 300,000 tons of wheat to southern Chinese Providences by July. China has been suffering from a severe drought. It is estimated that losses upwards of US $3.5 billion can be blamed on the dry weather. South America still has a lingering strike. The labor strike is making Argentina officials worry that they are going to struggle as a dependable supplier. If they are right, I hope it will help out Uncle Sam and company.

It appears that everyone is hesitant and in 'limbo' until the Stock in all Positions report comes on on Wednesday. A few of the past reports have surprised everyone and it will be very interesting to see how the market responds to this Wednesday's. The report has a range for corn between 7.76-7.32bbu. A substantial spread. Soybeans are expected to fall within a 1.27-1.61bbu. spread. Also a wide spread.

The Illinois River basis has firmed up nicely this week. Nearby soybean basis is -.04. The basis has firmed 3 cents since yesterday for beans. For those of you that are looking for more of an incentive to move the rest of your corn, the Morris Terminal is offering a premium for test weights better than 54lbs. and a very competitive schedule.

Weather outlook for northern Illinois is looking great. We may get a little precipitation on Sunday. Next week is looking warm and dry with temperatures getting into the 60's later in the week. We are getting reports that fields are drying out nicely and our friends in southern Illinois are able to do some field work. Yesterday 200 acres was planted near Bloomington, IL.

Have a great weekend and stay classy Illinois,
Nathaniel Dubravec

Wednesday, March 24, 2010

Wednesday March 24, 2010

Good afternoon! Prices overnight were lower courtesy of a strong US dollar. All commodities succumbed to overnight pressure and throughout the day trade.

Corn finished up 2 cents at $3.65. Beans finished down 8 cents at $9.60 after yesterdays gains.

The US dollar is strengthening. This has caused for some eroding corn, soybean, and wheat prices. The Euro also has weakened to a 10-month low against the US dollar. It's speculated this is partly due to the European Union talking about bailing out Greece's financial problems. Also, the market has been interested in what the Euro vs. US dollar does. Now eyes seem to be focused on the Chinese yen vs. US dollar.

Southern Chinese Providences are suffering from one of the worst droughts in decades. We've been hearing through the grapevine that Argentina's port strikes have been resolved. It's also speculated that China's demand for soybeans may climb to record highs this year. This is because of increased livestock feed and crush capacity. Our hopes is that this will help absorb the surging global supply of beans. 45mmt of soybeans will be shipped to China in the year ending Sept. 30, 2010. That's 5.9% more than last year. Interestingly, China's domestic soybeans have become large supplies for human consumption. Roughly 10 million tons of soybeans are used for foods such as tofu and soya sauce. One company in China will be capable of crushing 22,000 tons of soybeans per day once their new Rizhao City plant opens.

Best wishes,
Nathaniel Dubravec

Tuesday March 23, 2010

A little late on the Tuesday blog, my apologies. Corn down 8 cents on tremendous fund selling with reports of up to 12,000 contracts being sold. The weather pattern is looking good so far with a couple of systems due in the next 10 days but most of the heavy rain will favor the southern part of the US. The rivers in the Dakotas, Iowa, and Minnesota have pretty much all crested and if the spring rains stay a normal pace, things should slowly start to recede. A couple of corn planting progress reports, Mississippi 33% complete vs 22% average, Louisiana 40% complete vs 42% average, and Texas 38% complete vs 40% average.

Soybeans held their own staying unchanged on old crop but faltering 10 cents on new. A new crop sale of 120,000 tons to unknown destination were announced before the market opened. Traders are eyeing the Mar 31 USDA report as both corn and soybean planting intentions are to be released. Some traders are looking for our current 190 mbu carryout of soybeans to shrink to near 150 mbu before everything is said and done due to tremendous exports. If so that will put more support behind new crop prices to insure we don't dip down any farther next year. Brazil is expected to be 70% done with harvest by week's end.

Warmer drier weather forecast next week and SA harvest should keep futures on the defensive leading into the Mar 31 report.

Scott Meyer