Soybeans lead grains lower 9/21/09

Published on: 17:46PM Sep 21, 2009
Dec 09 Corn
315 ¾ 
- 2 ¼  
Nov 09 Beans
- 31
Dec 09 Wheat
454 ¾ 
- 2 ½  
Dec 09 KC Wheat
- 3
Dec 09 Min Wheat
492 ½    
- 4 ¼   
Dec 09 Meal
- 8.6
Dec 09 Oil
- 0.89

Corn, soybeans and wheat all closed lower. The soybean complex led the grains lower with soybeans, soybean meal and soybean oil all closing near the lows of the day. The weather looks to cooperate for the next two weeks and keep the Midwest warm and frost-free. This outlook is taking the frost premium back out of the market. Soybeans yields continue to come in better than expected in the western belt and Delta and if this trend continues, we should see national yield estimates continue to increase. Corn harvest shouldn’t pick up completely for at least another week in most areas. Early reports are good in the Delta, but it is still too early for enough reliable data out of the Midwest. The outside markets also weighed on prices with crude oil down around $3/barrel and the U.S. dollar higher. Weekly exports were very weak for soybeans at only 200,000 bushels. This is the second week of poor exports and is especially disappointing considering that the Chinese holidays begin Oct. 1st (usually we see strong Chinese imports leading up to holidays). 
There isn’t much new to talk about. With the Midwest now looking at a LATE FROST, the risk premium is quickly leaving our markets. We will have to see how actual yields turn out. So far, (actual) yield reports are very good with many 60+ bushels soybeans coming out of the western belt. This is still very early, and we will have to see if this trend continues. Early corn yields are also coming in good, but we have even less data than in soybeans so far. So, as with soybeans we will have to see how actual yields end up in the coming weeks. If the final crop size does end up larger as we expect, we should continue to see prices decline through harvest. Without the threat of a frost, we should see farmer selling continue to pick up. After the farmer sells whatever bushels he HAS TO, we should see a large percentage of the corn crop put in storage. This could help basis levels improve after harvest, but it should also keep a lid on prices. A lot will depend on demand. The USDA already has some very generous demand estimates written down. As I have said before, soybean demand looks too high and I think corn demand actually looks okay. These demand figures could certainly be met, but for that to happen we will need to see prices remain cheap for soybean meal and corn and/or prices for hogs, cattle, crude, etc. to increase.     

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