E Hedger Closing Grain Commentary 3/8/10

Published on: 16:49PM Mar 08, 2010
Market Settlement Change Low High 
May corn 375    - 1/2 372.75 378.5
May wheat 495    1 1/2 492.75 498.75
May beans 948    5 1/4 938.75 952.75
May soymeal 258.70 1.00 257.3 260.9
May soyoil 40.28 0.23 39.82 40.56
Apr live cattle 94.2 1.25 93.00 94.43
Apr lean hogs 72.800 -0.30 72.75 73.425
Soybeans and wheat closed modestly higher, while corn closed unchanged to ½ cent lower in the May contract. Tomorrow we do not expect any major market reactions ahead of this week’s USDA report. We are likely to see increased farmer selling in the days/weeks after Wednesday regardless of price action. Whether we see a bullish, bearish, or neutral corn figure bushels need to be moved as temperatures heat up and bin quality becomes a larger concern.

Below are analyst estimates for Wednesday’s supply/demand report.

Production               Average         Jan. USDA     2008
Corn              13.081           13.151          12.101
Yield              164.5             165.2             153.9
Soybean         3.35              3.361             2.967
Yield               43.8                44                 39.7

Ending Stocks   Average         Feb USDA     2008-2009
     Corn               1.713              1.719              1.673
     Soybean         0.195              0.210              0.138
     Wheat             0.971              0.981              0.657

Normally, this report is not as important as the end of the month prospective plantings and quarterly stocks report, but we are all aware of the resurvey. Estimates are for a tighter soybean supplies due to an increase in exports and crush. However, larger South American production will continue to weigh on soybean rallies, especially as their harvest progresses. The corn market has the most anticipated numbers on the report, production and exports. The optimism comes from thoughts of decreased supplies due to late harvested corn and low test weights. However, we do know that exports need to remain very firm in order to reach the current USDA projections. 

There does not appear to be any major changes to the wheat figures. The demand side for wheat continues to be poor. The ending stocks and stocks to usage ratio will remain high figures. Exports have been weak due to US wheat not being competitive on the world market. It is important to note that winter wheat acreage is down sharply, but first we need to work through current supplies.

Overall fundamentals have not changed significantly since January and this broad outlook needs to remain fresh in producers that have significant amounts of unsold grain. Meanwhile, the market appears to continue with its choppy action until the report. Please call us if you have any questions.

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