Monday, January 23, 2012
closing grain market comments Monday Jan 23rd; bull markets here we come?
Markets closed firmer for the grains today behind good demand and weather in SA.
Beans lead the way higher up 30, KC wheat was up 7, MPLS wheat was up 5, CBOT wheat was 9 higher, corn was up 9, the US dollar was down 430 points, crude up around a dollar, and the equities closed mixed with the DOW down 12 points. Overall another good day for the grains; we opened strong last night; firmed up during the session early, then backed off midsession, and when things where all said and down closed very firm; near the highs of the day for most of the grains. Technically the picture has turned much more positive over the past few sessions.
Export inspections at or above trade estimates as well as what is needed on a per week basis to meet current USDA projections helped show our recent increase in demand off of the price break. Corn came in at 35.2 million bushels, beans at 35.7, and wheat at 17.1.
Friday’s commitment of traders report showed the funds at a record short position in CBOT wheat. Ideas are we could see some short covering that would lead the feed wheat to gain a little over our hard wheat’s. Also it has been noted that we are getting closer to export business. (About time we where wheat and US export business in the same sentence.)
Basis in general is firmer across the board; about the only exception would be off quality wheat and the birdseed market. I have seen an increase in birdseed demand; but it has been more then meet with sellers; as the past month or two selling was non-existent.
Railroads are still performing very well and generally have cars just sitting around. Perhaps longer term this ends up having a positive effect on some of our markets because I have seen many asking the railroads for freight breaks to try and take product to non-traditional outlets. The more of this that happens now the better the chance is that the “should be buyer” ends up having to pay more later. At least that is my view on how it has worked in the past. Along those same lines is we are seeing the crush sunflower market slowly creep up towards the birdseed market. I felt that the main reason that we seen a huge rally in the birdseed sunflower market last year was due to the fact that so many flowers went to the crush at harvest time; way more then normal out of our area. (that along with good solid demand and a record snowing winter last year) I think that birdseed prices probably due struggle until the point comes that we take some of the overwhelming supply out of the market; when that does happen it should really open the upside potential just because of the relative short crop we have in the US. Limiting that as well as all of the grains will be the massive world supplies. Just one reason not to be afraid to sell a little bit here and there on these little rallies.
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