Closing Grain Market Comments 12-5-2013

Grain markets closed weaker today in choppy trade.

Corn was down 3 cents, KC wheat was 9 lower, MPLS wheat was 8 lower, CBOT wheat was a dime lower, Jan soybeans were down 2, the US Dollar off 400 ticks or so with the March futures at 80.440, crude is at 97.50, gold was off 22 bucks, and the DOW closed down 68 points.

Follow up selling for wheat today from the announcements the past few days that include bigger crops in Australia and Canada.  Plus no nearby issues for the wheat crop in the U.S.  It might not pencil out very good for producers trying to make a profit but the market doesn’t seem to care about that.

We did have export sales out this a.m. and considering it was a holiday week last week they were not super bad but overall they were on the disappointing side and didn’t help the bulls out at all today.

We did have corn and beans manage to get back to unchanged a couple times during the session but when the markets closed they both ended in the red. 

Technically you can find both some positives and negatives when looking at the charts.   You have some of the wheat charts back down towards some major support that hopefully holds.  But if it doesn’t it could really open up further technical downside.  You have soybean charts that have moved a little range bound the past few days and corn charts that had a very positive close early in the week.  But today’s price action for corn opens up the question as to was today a small breather/correction before moving higher or have the last few days been a breather before resuming the selling pressure????

Only time will tell for sure and it probably depends on what type of info the USDA puts out next week in their report.

Speaking of the report, CHS Hedging did release their pre-report ideas for next week’s USDA report.   Tim Emslie who is CHS Hedging Research Manager wrote up the comments for the pre-report ideas; he along with DTN Senior Analyst Darrin Newsom are our two speakers for the marketing meeting we are sponsoring this winter.  It is in Pierre at the Ramkota at 10 a.m. on January 20^th. 

Here is the link to the info.   https://www.chshedging.com/UserFiles/Documents/2013/Pre%20USDA%20Report%20Comments/120513.pdf

You will see that they are on the bandwagon of smaller carryout numbers do to strong demand.  But how much of that demand is because of the season (harvest)?  Also one needs to question what a couple things are doing to demand.  First off what is the producer holding pattern doing to demand?  Yes there is demand for products at present price levels; but if the American Farmer doesn’t sell do the buyers find a replacement of some sort? 

How about the horrible freight/slow moving trains?   As example I feel if mother nature would have cooperated a little more and if trains would have showed up a little faster that our elevators could have handled much more at harvest.  But things didn’t come together………….will the demand still be there later when the product wants to move is the question?

I have seen a few more orders pick up for the birdseed industry; but overall things are still slow.  We really need a little more demand.

Wheat basis, corn basis, and cash values in general seem to be all over the board.  I do like the idea of having some offers out there because of how volatile freight and basis is.  It helps us know what type of numbers we should be offering when we get someone looking to buy and that is worth a lot for end users.  To get coverage without having to call 100’s.

Please give us a call if there is anything we can do for you.

Thanks