E Hedger Closing Grain Commentary 12/10/2009

Published on: 18:05PM Dec 10, 2009
Settlements 12/10
Market Settlement Change Low High
March corn 393    9 1/2 380.75 396
March wheat 537    1 3/4 530 544
Jan soybeans 1027    -1 1/2 1019 1033.5
Jan soymeal 305.60 0.00 302.5 307.5
Jan soyoil 39.45 0.18 39.19 39.79

Ag markets closed mixed on the day. Corn settled nearly 10 cents higher, while beans were lower. Meanwhile, wheat closed mixed with Chicago slightly higher and Kansas City and Minneapolis slightly lower. Outside markets ranges were less volatile then previous days this week and did not provide a clear direction. This mornings USDA supply/demand and crop production report showcased the growing ending stocks for corn and wheat. See below figures. All three numbers, including soybeans were larger than the estimated levels. The report confirmed that the ending stocks are not a problem for corn and wheat, while providing a bit of relief in beans from the standpoint that demand has remained very high. Wheat stocks are massive, but prices look to be a follower to corn. I think corn supplies are sufficient, but are not going to grow like beans (South American production) and this may allow corn to lead the way to finish up the year. Yesterday and today’s market action certainly showcased corn as the leader. However, the affect of today’s report was not significant. Near term focus has shifted to the winter weather and there are some concerns over the last corn acreage to be harvested. The freezing temperature will harden ground to help in the final acres to be harvested IF producers can run the combines with the snow conditions. For now this looks to support breaks, but rallies beyond last month’s high look unreasonable with the stocks available. Weather outlooks continue to show favorable South American growing conditions, while Midwest weather remains cold. Of course money flow to wrap up 2009 and in the beginning of 2010 will be a major factor. If the short U.S. dollar/ long commodities trade unwinds further, we could see some fund liquidation before the end of the year.  I would make sure you are caught up on your sales.  Please call if you have any questions.
USDA Supply/Demand Report
Corn 09/10 ending stocks 1.675 billion MT vs. 1.646 (estimate) and 1.625 (November)
Bean 09/10 ending stocks 255 million MT vs. 235 (estimate) and 270 (November)
Wheat 09/10 ending stocks 900 million MT vs. 886 (estimate) and 885 (November)
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