Friday, December 4, 2009

The corn market today was sharply lower as most commodity markets were lower led by a $50.00 sell off in gold futures. Recent comments from Ben Bernanke of the Federal Reserve have given the US dollar a short term boost and commodities some short term pressure. The dollar index rose 120 points today breaking out from a long sell off after Ben Bernanke said he would not rule out raising interest rates to prevent asset bubbles. The weaker dollar we have been seeing has been partially attributed to low interest rates and has supported commodities in general. A factor in the market today was also a unemployment report today showing an unexpected .2% drop in unemployment to 10%. For the week corn was down $.30 with the lower market bringing out talk of poor export and feed demand. There will be a USDA Supply and Demand update Thursday December 10Th where traders will look for updated usage numbers to verify these feelings. Weather forecasts suggest favorable conditions for corn harvest activity over the weekend with winter storms expected for the Midwest the middle of next week.

Soybeans traded lower on a firm US$ and weaker crude oil and gold markets. The USDA did announce the sale of 232,000 tonnes US soybeans to China for 2009/10 marketing year, probably helping beans only lose $.04 for the day. For the week beans were down $.17 but that was after setting new highs for the move the past Monday at $10.78 in the January contract.

Phil Farrell

Thursday December 3rd, 2009

Well I hope everyone had a good Thanksgiving, seeing as I took the day off we are a week short on energy news. Not to worry little has has occurred in the last two weeks; we still remain in the sideways trend which has lingered for months. Its a match of tug of war between the bulls and bears each week, but by weeks end we finish about where the market started.
Crude closed .14 cents lower today at $76.46. Diesel was up a penny and gas closed unchanged. A rather uneventful day in energy, after yesterdays losses. Wednesdays DOE report was another reminder of dismal demand with builds in crude of 2 million bpd and builds in gas of 4 million. Diesel surprisingly showed draws of 1.2 million bpd, but overall weekly demand was still down. Refinery utilization was down .6%, keeping it under the 80% mark at 79.7%. The bearish news of yesterdays report gave back early week gains to render the week a stalemate.
The short term outlook is based on the old greenback. If we see any significant gains as the year comes to a close look for some of the long term crude portfolio folks to claim profits. This is my anticipation, as there annual reviews are based on profitability and profits can not be claimed unless the dice have been picked up and the chips cashed out. Stay tuned, I think the coming weeks will be interesting as the oil pyramid takes shape for 2010.

Tuesday December 1st, 2009

I hate to harp on outside influences but they seem to be all that is talked about lately. Gold again made a charge higher to settle just below $1200 ounce. The US Dollar was again much weaker today which led to the higher gold. Soybeans were again the leader in the Ag complex up as much as 17-18 cents before failing at the end to close 1 cent lower. Corn managed slight gains throughout the day before following soybeans and ended down 3 cents. The weak closes in the corn and soybean markets were very disappointing considering the higher outside markets. Argentina's main crop estimating firm put the Argentine soy crop at 52 mmt vs USDA at 53 mmt, but it is still much larger than the 32 mmt of production last year.

Crop Progress reported Monday night for nation:

Corn harvested 79% tw, 68% lw, 94% ly and 97% avg
Bean Harvest 96% tw, 94% lw, 98% ly and 98% avg

Illinois corn at 72% tw, 60% lw, and 99% avg
Illinois beans at 96% tw, 95% lw, and 100% avg

On a side note the first 2 days of November saw huge inflows of fund money and corn shot up 40 cents/bushel, it was a rough start to the December month today with money flowing in early and sending new crop corn to levels not seen since June before failing.

Scott Meyer