Markets are called weaker this morning behind a weaker overnight session, weak outside markets, and ideas that some of the deferred weather forecasts have a little more moisture in line.
In the overnight session corn was off 14-15 cents, beans where down a dime or so, KC wheat was off 11 cents, MPLS wheat was down 12, and CBOT wheat was off 15 cents. At 9:25 outside markets have European wheat off about 2.5 %, crude is off about 2.00 a barrel, the US dollar is up 505 with the cash index at 75.638, and equity markets are under pressure with the DOW down 130 points.
Conflicting reasons for the price movement this morning; some things I have read indicate weather is forecasted a little warmer then it was last week; while other things I have read are for it a little cooler. Bottom line is our markets really didn’t show any strength in the overnight session and with the weak outside markets we have to watch out for the markets maybe taking out a little of the weather premium that they have put into these markets over the past couple of weeks.
Basis remains on the firmer side for most of the grains; spring wheat basis feels heavy and with winter wheat harvest starting to hit our area we probably see local bids slowly go to new crop values. Plus with new crop that much closer everyday it becomes less likely that basis strengthens and more likely that it weakness as buyers feel there is too much supply out there at least until we see the protein levels or create the appearance that demand is out pacing supply as presently the market has a mindset that we will have (at least during the harvest period) more supply then we do demand.
It looks like we are in store for some more wild markets based on the outside markets and the money flow they push into/take out of our markets and the weather patterns we are seeing with the current tight balance sheets that don’t leave a lot of room for small yields unless demand falls off.
As for marketing keep in mind that we do have most of our grains 3.00 or so a bushel higher then they where a year ago towards the end of June 2010; nothing says that they won’t be back to that level sometime in the future. If outside markets where to show extreme weakness it could be a real possibility that our grains shows weakness; but so far demand is solid; but then again when spring wheat was over 20 a bushel in 2008 who would have thought it would trade back under 5.00 at some point?
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