Frigid weather in the Midwest and volatile markets!
Jan 19, 2009
While it was frigid in Chicago Thursday, the bean pits were hot! The market started out on project (a) with some weakness associated with some rains but then things exploded in nearby beans today. We saw a range from $9.576 to $10.24 or 68 cents because of stronger than expected exports. Lead month March is now going premium to the deferred contracts which I have to suggest is the beginning of the end of a bull market move. With the market being closed on Monday I have to suggest there is great risk the bean market will start to slide next week if any type of rain comes into the market. My guidance continues to be if you can get November beans back above $10 you need to be getting a floor under your 2009 inventory.
As for corn it was a rather dull day. We did see a brief time period of positive price action but overall you could sense the corn market was only up because beans were rallying. The corn exports were dismal late in the week and we are setting up for the potential that exports and ethanol consumption may have to be eventually dropped by USDA as early as the February USDA Supply and Demand report. More tomorrow.
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