Grains Start The Month Lower

Published on: 16:40PM Feb 02, 2009
Mar 09 Corn
370 ½
-8 ½
May 09 Corn
381 ¾
-8 ½
Mar 09 Beans
959 ½
-20 ½
May 09 Beans
965 ¾
Mar 09 Wheat
563 ¾
-4 ¼
May 09 Wheat
576 ¾
Mar KC Wheat
Mar Min Wheat
646 ½
-5 ½
Mar 09 Meal
Mar 09 Bean Oil

The Bottom Line;
1) Recent rains have helped Argentine crop, more rains expected this week and next
2) Conditions in Brazil continue to improve
3) China ends holiday season; the question is whether they continue to buy U.S. soybeans or if they switch to South America.            
All three grains closed lower today. Corn and soybeans were sharply lower for the majority of the day. After a lower weekly and monthly close on Friday, the market saw some follow-through selling today. The forecast still calls for rains in Argentina every couple of days from now until next week. This is relieving some of the concerns on continued crop deterioration. Now that the soybean crop is entering the filling stage, these rains have definitely come at the right time. With the South American growing season starting to finish up over the next 30 days, the market should continue to shift focus from South America back to demand and U.S. acres. Many people have been forecasting a large rally in prices in an effort to “buy” acres. Unfortunately, this has caused the farmer to hold an unusual amount of un-priced grain. I think this is a huge mistake. In my opinion, corn and soybeans will have more acres this year than last. With normal growing conditions, we could see ending stocks grow considerably in 2009. With acres increasing and demand still weak, prices should continue to break as we head into planting. The large amount of un-priced grain should keep a lid on large rallies for now.
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