Beans Take a Breather, Old Corn Supported...
Apr 03, 2012
· Grains mixed to lower overnight; Soybeans taking a breather while old crop corn holds together; Wheat has been the weakest leg of the ag complex early this week
· USDA reported corn planting 3% complete vs. 2% last year and 2% avg; Winter wheat rated 58% good-excellent vs. 37% last year, 48% avg
· Brazilian group Celeres lowering soybean estimate there to 67.9mmt vs. previous of 69.8mmt; Raised corn production estimate to 60.7mmt vs. previous of 60.4mmt
· Informa will release their world production estimates tomorrow morning
· Forecasters looking for a cold spell next week; Only northern areas should be concerned over frost/freeze prospects
· Corn vs. Soybean ratio in new crop contracts near 2.49 :1 this morning; Many analysts believe that significant amount of acreage will be switch from corn into soybeans as a result of the recent price shift in favor of beans
· Federal regulators approved applications from 20 companies to make ethanol for E15, a gasoline blend that contains 15% ethanol; Most fuel used in US currently contains about 10% ethanol
· Export Sales on Thursday AM at 7:30am CST; Grain markets closed on Friday in observance of Good Friday
Soybean producers should check local basis today. A few bushels at $13 cash would be a great way to kick off your new crop cash sales if you haven’t done so already. Option strategies are also viable. New crop corn may struggle to gain traction as long as the planting conditions remain favorable. Even if corn loses acreage to soybeans, the market will be tough to support without a weather issue. Old vs. new corn spreads should remain strong until some evidence of demand destruction is seen. Corn is in full-on demand rationing mode, trying to convince users to hold off until Sept or Dec to make purchases.
As always, call the office with questions or concerns.
Regards,
Joe Vaclavik
(312) 462-4438
