Grains End Mixed

Published on: 08:50AM Mar 18, 2009
May 09 Corn
390 ½
- 1
July 09 Corn
400 ¾
- 1
May 09 Beans
+ 2
July 09 Beans
910 ½
+ 3
May 09 Wheat
552 ½
+ 8 ¼
July 09 Wheat
564 ¾
+ 8
May 09 Meal
- 2.4
May 09 Oil
+ 0.45
The Bottom Line
1.Heavy farmer selling in corn market as cash levels reach $4 mark in many areas
2.Reports indicate Argentina may lower export taxes on Soybeans, Corn and Wheat; Commercials heavy sellers of Old crop/ New crop soybean spreads today
3.Aventine Renewable Energy Inc. (AVR) said Monday it may be forced to file for Chapter 11 bankruptcy
4.Grains still watching outside markets; awaiting the Planting Intentions Report on March 31.
All three grains closed mixed. Corn closed lower, wheat closed higher and soybeans closed higher, led by the new crop. A report out today claiming that the Argentine government may be lowering taxes on soybeans to 27% from 35% on some farmers and may also eliminate the export tax completely for corn and wheat weighed on nearby soybean prices. This has been a huge issue as most of you know, and if the government would lower the taxes on soybeans this could quickly free up supplies. The Argentine farmers are holding on to a record amount of soybeans from both this year and last year. Commercials were also major sellers of the old crop/ new crop spread today, which adds credibility to the story. An additional story reported that no agreements had yet been reached between the two, so your guess is as good as mine. Heavy U.S. farmer selling over the past two days helped tamper corn prices. The $4/bushel mark was hit in several areas for the first time in months and this triggered heavy selling. The strength in the outside markets and the largely anticipated Planting Intentions Report at the end of the month is providing us with an incredible selling opportunity in my opinion. Firming outside markets and uncertainty about the acreage report helped trigger short covering in our markets, and this buying has turned from short covering to new buying. The "funds" could certainly run these markets further if they want to throw enough money at us, and I would use this rally to catch up on sales before the report.
For those of you who are behind on 2009 sales, I would get caught up if December corn futures continue to rally $4.20-$4.50 and if November soybean futures continue to rally from $8.50-$9.00. If the market gives you the opportunity to sell $4.50 corn again and $9.00 soybeans again, you should take advantage and at least put in a floor before the March 31st report. Anything can happen this spring/summer and maybe we will have a sharp rally, but there are a lot of reasons why corn, soybeans and wheat can break sharply from these levels. The calls we bought last week will keep our upside open from these levels. We will look to cover our short put position if we continue to rally before the report. Give us a call if you have any questions, or click here to see all of our current recommendations.
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