Friday, October 14, 2011

market comments 10-14-11

Markets are called firmer this a.m. behind a firmer overnight session and supportive outside markets.

In the overnight session corn was up 4 cents, beans where 7 higher, KC wheat was up 7, MPLS wheat was up a nickel, and CBOT wheat was up 8 cents.

At 9:20 outside markets have European wheat up about 2 %, crude is up a little over 2.00 a barrel, and US dollar continues it’s weakness with the cash index down 445 at 76.550, and equities have a little bounce going with the DOW up 108 points.

This morning we did have export sales out and they where good for corn while in line with expectations for wheat and beans.  Corn came in at almost 50 million bushels for the second week in a row nearly 2 times what we need on a per week basis to meet current USDA expectations.  Beans also came in above what is needed on a per week basis to meet current projections but only inline with trade estimates and they continue to lag last years sales seen at this time; they came in at 24.7 million bushels.  Wheat came in at 17.8 million bushels.

Keep in mind that the latest USDA report is showing decreases rather heavy year over year for exports for the three grains.

Not a lot of other news out there; harvest continues to happen at a good pace but producers continue to be storing not selling so most of the grains are seeing basis firming up.   With harvest being bigger then expected for some look for basis to be rather volatile as we go forward.  If places get full it might not matter that producers really don’t want to sell; we could see basis under a little pressure in some areas for fall harvest.  Overall the recent news out there with China buying some corn should be long term friendly to basis; but we really need the trend of demand better then expected to continue.

I think that is one risk we have out there is the fact that many producers are not selling and that could create even more selling pressure later thus preventing rallies taking us as high as some feel and think they could.

The birdseed market is one market that really has showed little signs of demand and that market appears to be slower then slower.  No one seems to need or want anything.  The crush bid isn’t even close to where the birdseed bid is on sunflowers and that market to me feels much different then the bull market it has seen the past year.

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