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EHedger Report

RSS By: Dustin Johnson

Dustin works with a wide net of large producers throughout the Midwest. His analytical market approach and objective hedge strategy development is specific to the needs of every individual.

Corn And Soybeans Break After Argentina Improves, Demand Weakens

Jan 27, 2009
SETTLEMENTS
             
Mar 09 Corn
377 ½
-16 ¼
May 09 Corn
388 ½
-16 ¼
Mar 09 Beans
976
-33
May 09 Beans
983 ¾
-33
Mar 09 Wheat
584 ¾
-7 ¾
May 09 Wheat
597 ½
-7 ¾
Mar KC Wheat
615
-6 ¾
Mar Min Wheat
662 ½
-3
Mar 09 Meal
308.6
-7.7
Mar 09 Bean Oil
32.77
-1.00
 
                       
All three grains closed lower. Corn and Soybeans closed sharply lower and wheat followed. The recent rains in Argentina combined with additional forecasts next weekend and next week combined with lower temperatures, drove corn and soybeans sharply lower. If additional rains develop this weekend and next week, Argentina conditions should continue to improve and the market should start to focus on demand and U.S. acres. Meat prices and energy prices continue to break and this is also weighing on prices as margins in all sectors continue to suffer. Talk of changes in U.S. ethanol policy and continued buying of RIN certificates by blenders is weighing on the ethanol industry. Vera Sun has closed 12 of their 16 plants and national capacity is now down 5% since last October. Blenders continue to buy RIN certificates, as they are cheaper than buying ethanol and blending it with gasoline. These factors could lead to corn demand from ethanol down another 200-300 million bushels. Animal numbers continue to decline; yet prices continue to collapse.   Unfortunately, demand does not look bright for the corn market, and with China on holiday, the only strong demand factor is absent. Brazil and Argentine production will be down due to the drought in Argentina, but even aggressive estimates only lower total production by 200-300 million bushels. The problem is that demand is falling faster than supply. Again, a lot can change but right now prices just look too high.
                       
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Trading commodity futures and options involves substantial risk of loss and may not be suitable for all investors. The market information contained in this message has been obtained from sources believed to be reliable, but is not guaranteed as to its accuracy or completeness. Market information may not be consistent with current or future market positions of E Hedger, its affiliates, officers, directors, employees, or agents. Recipients assume the risk of reliance on and indemnify and hold E Hedger harmless for any and all losses, costs, or tax consequences incurred as a result of their use of market information.
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COMMENTS (10 Comments)


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