Markets are called mixed to better this a.m. behind the
firmer outside markets and firmer overnight session. We also received some confirmation of the
corn in the last day or two.
In the overnight session corn was up 5-6 on old crop, new
crop corn was up 3, beans where very strong with the old crop up 28-29 cents a
bushel, new crop beans were 17 cents better, KC wheat was up 6-9 cents, MPLS
was down a penny to unchanged, and CBOT wheat was up 5-6 cents. At 8:50 outside markets have equities firmer
with the DOW up 88 points, Nasdaq up over 2.5 %, the dollar is slightly weaker
with the cash index at 79.081, crude is up about 30 cents a barrel, and gold is
down about 5 an ounce.
The USDA did announce some corn sales to Unknown as well as
China this a.m. This along with the
announcements yesterday are now well over 1 mmt since Friday in the daily
reporting system. Most has been to
unknown which typically ends up being China or at least the market will guess
it is China. This a.m. announcement
finally had quite a bit of new crop which makes more sense given the huge
inverse between old crop and new crop.
Yesterday the USDA confirmed the 4th case of mad
cow or BSE after the grain markets closed.
Despite this the markets rallied very strong last night with beans
leading the way. I read something this
a.m. that had a projection for the South American/US bean balance sheet to be
tighter then it was in 2009 and that our March 13 stocks could be the tightest
ever. There is now some weather talk of
possible freezes in Argentina damaging late maturing beans.
Yesterday we had Stats Canada come out and they report wheat
acres at 24.324 million versus last year
at 21.464. Canola was 20.372 versus
18.862. The estimates were in line with
expectations for the most part; the market does appear to think we could add a
little more Canola and take off a little wheat as we go forward or get more
updates. The big difference from a year
ago is the acres that didn’t get planted last year and look to get planted this
year. This is also the big difference in
the US; a lot less prevent plant acres.
The report I seen for the Canadian acres showed an increase for every
single crop listed.
The stock market strength is on the heels of Apple who
reported better than expected earnings after the close yesterday. On the early going it is up over 9% or $50
plus a share which has the Nasdaq up over 2.5%.
After cattle being limit down yesterday from the mad cow
announcement they are bouncing today.
Keep in mind that softer livestock prices don’t exactly support higher
feed costs for feed grains.
Basis for corn and beans remains very firm; with more demand
then available supply or supply that is for sale at these levels. It still feels to me that producers own plenty
of grain but they are also doing a great job in not having to market it. At the end of the day the discipline they have
is helping out our prices; but it is also the big risk that is out there. What happens if everyone has to run to the
exit door at the same time to make sales?
Nothing good for basis or the board.
So don’t forget to have a solid good risk management approach in your
grain marketing one that might include a little risk diversification and making
sales during the seasonal times that one is really suppose to.
Don’t forget that we will have our weekly MWC Marketing Hour
Round Table this afternoon in Onida where we will be going through some charts
as well as overall discussion on our markets and possible strategies to use.
Please give us a call if there is anything we can do for
you.
No comments:
Post a Comment