Opening Grain Markets 2-11-11

Markets are called mixed this a.m. behind a mixed overnight session and weaker outside markets.

In the overnight session corn was down 2 cents, beans where unchanged to up 2, KC wheat was down 1, MPLS wheat was unchanged, and CBOT wheat ended the overnight session up 3.  At 9:20 outside markets have the equities slightly weaker with the DOW down 15 points, crude is off about 30 cents a barrel, European Wheat is down about ¾ of a percent, and the US dollar is firmer up 253 on the March at 78.575 as it follows it’s strength from yesterday up. 

Grains in the overnight where higher at one point as

 wheat did end the overnight session 5-9 cents off of it’s nightly highs.

Nearby basis is firm across the board for all of the grains while basis on things like corn to the PNW for deferred slots is weaker.  The railroads have been performing badly lately (in our area and for us I would say horrible; with some of our locations see the worst service they have ever seen). 

With the basis slipping on old crop corn deferred slots like April and ethanol plants as well as other feed users having margins in the red or not near as high as they have been over the last year or so one does have to wonder if we are seeing some signs that the demand isn’t all there.  Perhaps it is just good coverage on the nearby and a logistical infrastructure that can’t handle it all when it typically wants to move?  The other thing that has been out there lately is talk of some ethanol plants shutting production down.

The markets seem to be “buy the breaks” type of markets and probably remain that way until proven otherwise; with the big size that the speculators have we are subject to see a correction of big nature; but until something fundamentally changes our markets will have the potential to bounce with the sky really the limit on the grains that could actually see supply run out.  This should keep the potential for a grain like wheat to sell off hard for no reason; yet the potential to bounce with the other grains and if fundamentals improve a greater then expected bounce also becomes a possibility.

Buying interest in the birdseed market is starting to become very hit and miss; offers and bids are on the wide side.

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