EHedger Closing Grains Commentary 12/17/09

Published on: 16:10PM Dec 17, 2009
Settlements 12/17

Market Settlement Change Low High 
March corn 397    -13 1/4 393.25 410
March wheat 518 1/2 -18 3/4 514.25 539.25
Jan soybeans 1022    -37 1/2 1015.5 1063.25
Jan soymeal 307.40 -9.50 306.6 317
Jan soyoil 38.64 -1.69 38.45 40.38
Dec live cattle 81.425 -0.7 81.35 82.25
Feb lean hogs 65.550 -1.28 65.30 66.575
Corn, soybeans and wheat all closed sharply lower. Weekly sales figures were good for corn and the soybean complex and remain weak for wheat. This helped support prices early but a sharp rally in the U.S. dollar and sharp break in the outside markets helped grains break sharply. As I have said before, at these prices the grain markets will need a continual flow of investment money to keep prices supported. Corn and soybeans rallied back to the high ends of their ranges. Corn demand suffered and South American soybeans have become discounted to U.S. beans. The U.S. dollar is now at the highest level in over 3 months. There are a lot of “new longs” in our markets due to the falling dollar and expectations of new money flows at the start of 2010. The expectation of “new buying” in 2010 could have been the main driver of the recent rally in prices. Bears and Bulls alike have agreed that a strong round of buying will indeed occur at the beginning of the year. Bulls are long and waiting and the bears are flat and waiting. Usually the market doesn’t let everyone be right. It could be that we have already experienced the run-up that everyone is hoping for in January. Or, this could merely be a setback in a holiday market. Either way, the market has become unpredictable for now. As producers you should be caught up on your sales. I don’t know whether or not buying will continue to push prices higher from here or not. I do know that the demand has suffered at current prices and it would be easy to see a major break as we head into the spring. I will continue to recommend selling new crop corn and soybeans if we make new highs at the beginning of the year. Prices are good and a producer can lock in sales at very profitable levels. As always, please call if you have any questions.

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