Corn pressured all day, while beans close unchanged 4/01/09

Published on: 17:20PM Apr 01, 2009
May 09 Corn
- 9 3/4
July 09 Corn
405 1/4
- 9 1/2
May 09 Beans
954 3/4
+ 2 3/4
July 09 Beans
953 1/2
+ 3
May 09 Wheat
- 7 3/4
July 09 Wheat
- 8 1/4
May 09 Meal
May 09 Oil
- 0.09

Corn and wheat closed lower, while soybeans finished the session near unchanged. Everyone has now had the chance to fully review yesterday’s acreage report numbers and determine their effect on grain prices. It appears that yesterday’s sharp reaction for corn and wheat was overdone as both of these markets were under selling pressure the entire day. Corn rallies will continue to meet farmer selling, which has many bushels priced at $4 and above. With USDA acreage now known it appears that outside markets will influence grain trade for the rest of the week. While major changes are not expected it does need to be noted that there currently is a G20 meeting in London. China and Russia are looking for a world currency rather than the US dollar. The faster world economies can recover will lead to better outlooks for commodities. Tomorrow’s trade will be key in determining a near term trend for grains. If prices work higher it will show renewed strength from weather, the report, and potential further fund buying. However, keep in mind that most end users are printing red ink and this limits demand. If prices begin to work lower it will carry a negative tone into the summer. Excluding spring weather scares, yesterday’s acreage will likely be the lowest total we see all year.   
Using these acres and trend-line yields; most analysts will be using a 250-350 million bushel carryout for soybeans, a 1.3-1.5 billion bushels carryout in corn, and a 600-700 million carryout in wheat. Although these carryouts would still be ample, the market will remain very nervous on weather concerns this spring. (Many people are already talking about a wet spring). Ideas on final acreage will continue to be strongly debated as we head through spring. Weather will obviously be a big factor and this will influence the market's opinion of what final acres will be. With the market now "worried" about having enough acres, keeping prices high through the growing season will only hurt demand worse. However, the market is not worried about demand right now. The funds have already established "long positions" and today's strong close should trigger more buying. With the report out of the way, we should quickly shift to weather.... let the fun begin! Give us a call if you have any questions, or click here to see all of our current recommendations.

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