March 20, 2009

It's the first day of spring and the marketplace appears to be on a break. With corn finishing the day unchanged and soybeans posting modest gains of 11 cents on old crop and fractionally higher on new crop. Other than the inflationary argument, we have not necessarily made any fundamental change in our supply and demand items. One could argue that higher prices from here are likely to add to our corn acreage and further hurt demand. Production would be a longer-term bearish item.

Large speculators exited short positions in Chicago Board of Trade corn, soybean and wheat futures this week, shifting to net long in corn for the first time in months, according to Commodity Futures Trading Commission data released on today.

Soybean futures closed higher Friday, with the nearby May contract leading the upside on worries about tight old-crop supplies and disputes in Argentina. The markets felt support from ideas that a dispute between Argentine farmers and the government could shift more demand to the U.S. from South America. Farmer unrest revolves around unhappiness with Argentina's grain export tax.

~Have a good weekend - Chris Spurlock