Johnston Pro Farmer Senior Markets Editor
as of 7:00 a.m. CT
Seasonal low near?...
... Is the worst behind for the economy? Nothing like answering
a question with a question. But we are in an uncertain atmosphere.
a good conversation with a farmer from Indiana yesterday about "what to do
with this extra 10% of corn I didn't expect?" I hope many of you are in that
situation this year -- early yield results above expectations. He had forward
sold about 60% of this year's crop, which is in line with our advice, and had
room to store the last 40% or so, but didn't know if he should pay for storage
at the elevator for that unexpected "10%" or if he should just sell
I told him the market should be posting a seasonal low
-- and may have last week -- but we won't be convinced of that unless the market
can continue higher. It very well could just sit here for a while in a choppy,
sideways pattern. But my biggest concern of course is outside markets. The dollar
moved to a new-for-the-move high yesterday and crude oil was sharply lower. Until
the market feels like the worst is behind the economy, outside markets will continue
to limit upside potential for the grain markets.
words, sell the 10% -- which is 100% profit (since production costs were covered
on the initial 60% sale) and we'll wait to see if the market recovers between
now and next September for the remaining 40%. A key in his scenario -- basis is
just 15 cents under. That's tighter than most areas, making this decision a little
Also, after three days of corrective gains, corn and
soybeans were lower yesterday, signaling the move off the lows was just a corrective
Keep your comments coming. Always good to have
conversation with you and input on what you'd like to talk about. E-mail
your comments/question to me by clicking here. Please include your location.
Opening calls. These calls originate
more than three hours before the open -- use caution, things change:
Corn: 15 to 17 cents lower. Futures were lower overnight on outside
market influences. Futures closed weaker yesterday, pressured by outside markets,
as crude oil extended early losses to trade sharply lower and the dollar extended
early gains to post a new-for-the-move high. Given the high level of concern about
the global economy, upside potential is limited to short-covering until traders
believe the worst is behind the market.
Soybeans: 17 to 21 cents lower.
Futures were lower overnight on continued weakness in crude oil this morning.
Futures closed lower yesterday due to outside market influences. Outside markets
will continue to play a key role in determining price action. January soybeans
are trading about in the middle of the broad short-term boundaries from the Oct.
16 low of $8.83 to the Oct. 9 high at $10.03.
to 12 cents lower. Futures were lower overnight on spillover pressure. Futures
finished in the lower end of yesterday's range, with Chicago around 12 to 14 cents
lower. Unless outside markets are supportive, wheat will struggle to find buyer
interest as attitudes are bearish. Initial support for December Chicago wheat
is at last week's low of $5.43. Below that level is the July 2007 low at $5.40.
Cash cattle expectations:
Watching beef market. Feedlots say they will hold out for firmer
cash bids this week, but no active bidding has been reported yet. This week's
showlist is tighter and commercials were behind yesterday's rally in the live
cattle pit. That could be a signal of a near-term cash low being in place. Choice
beef values were down 52 cents and Select rose 16 cents on stronger movement of
Futures call: Steady to firmer. Futures
posted a high-range close yesterday, which is expected to result in spillover
gains today. Commercial buying was strong yesterday. If that is noted again today,
it would lift traders' expectations for this week's cash trade and help to support
Cash hog expectations:
Steady to weaker. Market-ready supplies remain plentiful and packers
say this week's needs have largely been booked. On top of that, rains in the Midwest
have some producers looking to catch up on hog marketings. While pork movement
and prices were higher yesterday, packers will use it to improve profit margins.
Futures call: Steady to firmer. Futures are called
steady to firmer based on spillover from yesterday's gains. However, key will
be if traders feel the need to continue in this short-covering bounce given continued
cash weakness. February lean hog futures have now posted three days of corrective
gains. A higher close Wednesday would signal an extended bounce. Tough downtrending
resistance intersects at $66.38 Wednesday.