Grains end the day in choppy trade range 8/20/09

Published on: 15:52PM Aug 20, 2009
Sep 09 Corn
318 ½  
- 1 ½ 
Dec 09 Corn
- 3 ½ 
Nov 09 Beans
- 1
Sep 09 Wheat
+ 3
Sep 09 KC Wheat
498 ¾ 
+ 1 ½
Sep 09 Min Wheat
538 ¾  
+ ¼
Dec 09 Meal
+ 0.1
Dec 09 Oil
- 0.31

The grains closed mixed. Soybeans and corn closed mostly lower and wheat closed higher. All three markets traded both sides of unchanged. Not much fresh news. Export sales were good for corn and soybeans and decent for wheat. Weather outlooks remain favorable and this is pressuring prices. The crushing industry is slowing down the crush pace, and this is helping margins improve. With new crop supplies close, the crusher is unwilling to pay up for “old crop” soybeans. Instead, they are slowing the crush and increasing their margins. This is why we are seeing nearby meal prices rally. Although this could be very bullish for September soybean meal and maybe even October meal, it isn’t bullish for new crop soybeans. Soybean meal is being rationed with cheap alternatives (ddg’s, corn, feed wheat, ect.) and lower animal numbers. With good rains catching the majority of the belt, the last “weather hurdle” will be the frost date. If we get an early frost, the market will rally and if we don’t, it will break. I don’t want to over simplify it, but that is the fact. The weather has been good since the late start, and a good finish will result with big crops and cheaper prices. Eventually, these cheaper prices will help build back demand and help prices recover. Building demand takes time however, and without hurting production (i.e. freeze) it will be hard for prices to rally until after harvest. We have adjusted some of our recommendations and added some new recommendations. Please make sure you are current on these recommendations and/ or have spoken with your broker.
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