Markets closed mixed today in another volatile day of price action.

Markets closed mixed today in another volatile day of price action.

Corn ended up being the only one of the big three grains that was able to stay positive as it closed unchanged to up a penny, beans where down 18, KC Wheat was off 20 cents, MPLS wheat was down 12, CBOT wheat was down 23-24 cents, crush sunflowers where down 20 cents, equity markets where mixed as the DOW was down 11 points, crude was near unchanged, and the US Dollar bounce with the March up 644 at 78.365.

The grains had a little correction after making contract highs on yesterday’s crop report.  The weakness in the US dollar along with overbought conditions helped lead to some profit taking in today’s choppy trade.  We did have export sales out this a.m. and they helped support the corn market while weighted on the beans and wheat markets.

Wheat exports where 14.4 million bushels which is in line with the projection by the USDA, but it was the softest we have seen in 3-4 weeks.  Beans came in at only 800,000 bushels.  Corn had great export sales coming at 43.6 million bushels which is much better then the 30.6 needed on a per week basis to meet current USDA projections.  

I thought it was very good to see corn put in contract highs over the past couple of weeks and at the same time the two best weeks for export sales for the marketing year.   This trend is one that if can continue could lead to even more talk of the USDA tightening up our balance sheet.

Yesterday the USDA had uneventful report for beans and wheat; while a bullish one for corn.  Today we followed up via seeing some profit taking on some of our grains as we have had a nice run up; yet we failed to feed the bull so a sell of should be expected as should volatility especially in terms of cents per bushel.

Look for many pricing opportunities and risks as we go forward as over the past couple months the only thing that the market has really done a good job of is making more questions or adding more uncertainty.  Some of the things we really haven’t defined that perhaps we thought we could have include what level do we see price rationing for corn, what price levels in grains are too much and cause severe demand slippage, at what point do the funds liquidate or how long or how much ownership do they try to capture.  Add to some of these all the various fundamental questions like planting intentions, weather, and the other outside influences it becomes easy to see that we could see rather volatile markets moving forward. 

The past week or so basis has been on fire for spot business; the problem is that the same thing that causes this basis appreciation is the same thing that has had many of our elevators full.  Logistics or lack of freight cars for one to load; so even though basis feels better and has traded better only a few limited sales are taking place.  Add to that the typical spill over effect that slow freight causes (double booking) and you could see a rather severe correction when freight does break.

We will be having a couple grain marketing workshops this year again.  One will be on March 7^th in Ft Pierre at the American Inn and the other in Philip on March 8^th.  Please give us a call for more details or to RSVP.

Also don’t forget our annual meetings are next week the 15^th and 16^th.

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

Thanks

Jeremey Frost

Grain Merchandiser

Midwest Cooperatives