Daily Grain Comments

Note: Corn Products in Chicago will be closed MONDAY AND TUESDAY, June 14-15, 2010. They will re-open at 5AM Wednesday, June 16, 2010.

Elburn Coop in Morris will be open for corn and soybeans on Monday, June 14, 2010.
Elburn Coop in Ottawa will be open for corn on Monday, June 14, 2010.

Commodity news was generally supportive today. News that China’s main grain buyer (COFCO) bought another 3 cargoes of US corn gave corn traders some ammunition out of the gate. Word from the Canadian Wheat Board that between 8.5 to 12.5 million acres of all crops might not get planted there supported wheat futures late and spread into corn and soybean markets also. Traders are still digesting Thursday’s USDA supply and demand report where corn used for ethanol was increased significantly which lowered carryout in the current and next crop year. I have seen speculation that part of the reason for the increased corn use estimate is the US government will promote renewable fuels more heavily in the aftermath of the oil spill in the Gulf of Mexico. ADM formally requested US EPA to allow 12% ethanol gasoline blends this week. Good timing on their part. Weather conditions are generally good but, there are some areas that have seen too much rain recently. This has limited soybean planting in those areas and hampered growth of crops already in the ground. Export sales were generally good yesterday (and much improved from last week) for corn and soybeans. However no new corn sales to China appeared and an unusually large (for this time of year) amount of 2009/10 soybean sales to Japan has been questioned. Weather forecasts favorable for crop development and potential for a very large corn crop provide resistance for corn prices. Large amounts of imported soybeans at Chinese ports has caused China to cancel several cargoes of soybeans from South America. Though US stocks of old crop soybeans are tight, lack of Chinese buying interest in the world market limits any rally of soybean prices. Locally soybean basis continues to be strong nearby (and inverted). We continue to offer free DP until October 15, 2010 for soybeans in storage or delivered to Elburn Coop facilities.

In today’s trading, grain and soybean futures were all positive at the close. July corn finished up 6 ¼ for the day and up 9 ½ for the week. July soybeans closed up 11 ¼ and up 11 ½ for the week. July Chicago wheat futures finished 7 ½ higher today and up 5 for the week. Outside markets for equities and crude oil were generally weaker most of the day with disappointing retail sales being reported this morning. Equities did recover to post a gain late.

National average on highway diesel fuel prices were lower for the fourth week in a row dropping 3.4 cents in the latest report. Crude oil prices stayed in a narrow range recently and this should limit fuel prices for the time being. Crude stocks dropped slightly this week while gasoline stocks were steady and distillate (diesel) stocks rose slightly. Stocks of all three products are historically high.

Have a great weekend!
Mike Etienne