Thursday, May 6th, 2010

Wow. Can you say "sell-off"! This week has produced the largest three day energy skid of the year; I haven't seen anything this ugly since the last White Sox's game. Today's catch phrase was "panic sell-off", as the DOW slid to February lows and energy continued its three day collapse. Crude closed today at $77.11, diesel was down .07 plus cents and gas wasn't far behind at .06 cents. Last time we chatted crude was on the up tic, at $85.17, that is an $8 loss in a week.
It appears worries over Greece and other European nations debt crisis, once again pushed investors out of riskier oil and equities, into saver waters such as the dollar. Hopes for big energy recovery are diminishing as most are realizing that inventories far out weight demand and promises of great future demand are coming up empty. Today's sell off is being blamed on different reasons, most still based in speculation, with little concrete evidence. It is said that the Dow experienced some sort of "computer glitch", I have heard that one before, or the more likely 10,500 point sell stop orders are to blame for such high trade volume; Either way, it was ugly. Tomorrow will be interesting with most experts pointing to late day rebounds as the possible new direction, "buying opportunity" is the new catch phrase.
The short term outlook for energy is still weak with inventories high, demand down, and prospects of future demand looking grim. The best thing the energy market has going for it, is the three day beating it has taken, it could mark it ripe for the picking. Tomorrow is a new day, lets see what happens.
Good evening,
Zach Winter

Wednesday May 5, 2010

Good afternoon bloggers! Today was a very interesting day to say the least. Corn opened down this morning and stayed down for the majority of the day. Fortunately, a nice corn rally finished the day off. Corn finished +4 cents @ $3.73. Beans opened down and closed down -9 cents @ $9.78.

The AG markets put on a mixed performance throughout the day after initially opening in the red. Corn was in the red for most of the day until a late rally. Rumors are still flying around in regards to China purchasing more corn. We have heard China bought 8-10 cargoes of corn. Regardless of if China did or did not buy corn, it may have boosted corn prices. Domestic corn prices in China have soared since 2009 and it may be that they are looking at the USA to supply them. USDA pegs corn emergence at 19%.

Livestock prices have been doing very well as of late. Hog prices have been climbing higher this spring and last week's cash price is the highest since 2008. S&P 500 and the Dow Jones Industrial Avg. were both down. USA dollar is up today and crude oil is down $3.11/barrel.

Soybeans are ~15% planted vs. 5-year average of 8%. Producers have been going hard and are ahead of planting schedule averages. Movement and sales have seemed to slow the past few weeks. South American crop availability is probably to blame for this. New Orleans' soybean values are down 14% from a year ago. South American values are down 31%. The New Orleans soybean basis is at +28 cents over FH May. As of right now the oil slick in the Gulf of Mexico has not been problematic in the Delta area in regards to freight.

Have a great one,
Nathaniel Dubravec

Tuesday May 4th, 2010

Corn dn 2 cents, beans unchanged, and wheat up 10 today as all 3 markets were much lower this morning and closed near their high today. The outside markets were much lower today with crude dn $3.45 at the time of this writing and the dow industrial down 248 pts! The Greece financial problem has again reared it's ugly head up as well as Spain and other European countries. The US dollar is benefiting from all of this negativity out of Europe and the stronger dollar is usually always negative to commodities in the investment world. Planting progress in Northern Illinois is going off without a hitch and as is the case in much of the corn belt. It appears planting will be done in record time with almost no current drought areas on the national map, sounds like a big harvest in the making.

Got an e-mail today on the oil rig explosion in the Gulf of Mexico and wanted share a few thoughts. I would first state that the 11 missing men are still missing and authorities have said they do not expect them to be found. The oil rig was contracted by BP for $500,000/day and with helicopters, support vessels, and other services it is estimated at $1 million/day! The rig is a state of art floating rig that is held in place not by anchors but jets under the water that use constant GPS signals to keep the rig in one place. The rig cost $350 million to build in 2001 and would cost more than double that to rebuild today.

Scott Meyer

Monday May 3rd, 2010

Grain commodities taking a hit today as concerns worsen about the oil spill that is potentially threatening to shut down export operations in the gulf. Planting continues on a record pace as well, with the USDA announcing corn planting at 68% nationwide, Illinois at 87% and Iowa at 84%. The strength of the dollar was the catalyst for the declines, with the absence of fresh news in the face of bearish underlying fundamentals keeping many buyers on the sidelines.

Weather is looking mostly dry and seasonable weather will affect the central U.S. into Thursday, followed by rain in northern/eastern corn and soybean areas Thursday and Friday. Notably, the Delta stays mostly dry over the next seven to 10 days as the best rain chances focus to the north.

Chris Spurlock