Tuesday, January 10, 2012

opening grain comments a couple days ahead of USDA report Tues Jan 10th

Markets are called mixed this a.m. behind a choppy mixed overnight session, pre-report trading, and supportive outside markets.

In the overnight session we saw corn unchanged, beans unchanged to down a couple, KC wheat off a couple, MPLS wheat was down 4, and CBOT wheat was down 3.  At 9:00 outside markets have the DOW up nearly 100 points, crude up a little over a dollar a barrel, and the US dollar in the red with the cash index down 222 at 80.825.

A waiting game is what some are saying this a.m. as parts of S.A. get some moisture; the market waits to see how much and how wide spread coverage.  Forecasts are still for hot and dry after the current weather event.

More then the weather the market is waiting for the big USDA report which is out on Thursday.  Don’t forget that we did move our weekly marketing meeting to this afternoon and we plan on covering the USDA report as well as some strategies to consider heading into the report.

Here are the estimates heading into the report.  Don’t forget this report will also have the final crop yield as well as winter wheat planted.

U.S. ending stocks 2011/12

                             Wheat    Corn Soybeans
Average trade estimate       0.842   0.749   0.233
Highest trade estimate       0.888   1.020   0.285
Lowest trade estimate        0.766   0.587   0.127
USDA December estimates      0.878   0.848   0.230

Basis is defensive and likely remains that way until we see some sort of export to domestic competition.  This goes for most of the grains; and wheat and corn in particular.  We lack the export demand and the domestic demand is soft.  For corn the domestic demand should be soft if the ethanol plants are running in the red like many are saying.  Wheat mills simple feel full and know that we lack export demand (competition) and we have the rail road have one of their best performances of all time for the winter season which just adds supply.

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