10/7/13 Market Summary Corn Dec corn closed up 6.0 at 449.25. 1 year ago it was 742. Late rumors of Chinese interest rallied corn. Dow was down 147 points today. Brazil’s summer crop is 31% planted vs. 24 avg. Exports shipments came out in piecemeal fashion with corn totaling 25.3mbu last week while milo was 2.0. Yield reports continue running 5-10% above expectations in 80% of the belt. The cash bean/corn ratio is running around 3.2 all across the Midwest. This compares with a normal high to low range of 2.0-3.0 and a recent average around 2.2. The Nov14/Dec 14 futures ratio is 2.40. S. Am farmers have also been looking at this ratio against their new crop May option. SK14/CK14 is 2.69. The strength of the ratio will encourage farmers worldwide to sell more beans and plant more beans. In comparison, it will encourage farmers to sell less corn and plant less. So, in spite of the very big yields coming on, it appears the corn market will struggle to get adequate cash ownership for a while. This means the futures carry may not widen going into early winter one would normally expect. Beans Soybean futures market under water most of the day, until the last half of the session, managing to close higher on the day. Export shipments slipped through the cracks and got released at normal time today, with soybean shipments at 30.5 mbu. Several wire services have released the news that the USDA report will be postponed, but did not have a suggestion for when it might be. Another round of rains is expected this upcoming weekend. USDA not open today, but if they were, the trade was looking for harvest progress at 22-24%, vs 11% last week, and 40% the 5-year avg. The Chinese were on National Holiday last week, and the market is expecting them to have pricings or perhaps new purchases upon their return. The USDA will not, most likely, release new sales news, but the market may react to that kind of activity. Going forward, the ability to get into the field; yields; and weekend weather forecasts may be drivers of futures, in addition to Potential Chinese activity Wheat The hot topic to start the week for the wheat traders continues to be the ongoing planting delays from the Black Sea. The bullish price momentum was also aided by technical buying as futures settled near their session highs posting 5 to 8 cent gains across all three exchanges. Fundamental news was very quiet and if anything bearish as extended forecasts for Ukraine and Russia would indicate a solid 2-week stretch of warmer and drier conditions which would be ideal for planting conditions. That outlook was largely ignored with the emphasis on the optimal planting window passing for the last ½ of the wheat crop. We should be able to determine how competitive US wheat is in the global market with tenders from Algeria, Morocco, Iraq and Jordan expected over the next week. Weekly inspections did appear on the USDA website, and were just under 30 mbu, or over 11 mbu more than we need to average to meet the annual USDA projections. The President and CEO of the CN railroad indicated that the Western Canadian crop production could be one of the largest harvests in history with logistics now a concern. Spring wheat basis continued to slide while HRW and SRW basis values were steady.
Posted on: Tue, 08 Oct 2013 12:31:54 +0000