EHedger Afternoon Grain Commentary 11-10-2011

Published on: 15:06PM Nov 10, 2011

Grains finished weak after poor export sales for corn and a continued weakness from the Supply and Demand report.  December corn finished 9 ½ cents lower at $6.46 ½, January soybeans 16 cents lower at $11.69 ½, and December wheat down 21 ¼ cents at $6.21 ¾.

Today’s export sales for corn were extremely weak at 251,900 MTs.  This was down 60 percent from last week and 75 from the 4-week average.  Corn basis has remained strong, but a lot of that could be the ethanol tax credit expiring and ethanol producers rising up to meet the demand of the blender before year end.  For bean sales we were a bit stronger at 604,000 MTs and wheat sales at 298,500 MTs.

Yesterday’s S & D report was rather neutral for corn and bearish for beans/wheat.  For corn they did lower their yield estimate to 146.7 bringing their total production estimate down 123 million bushels from the October report. At the same time they also lowered their feed estimate by 100 million bushels so their overall carryout was still pegged at 843 million bu which was above estimates.  We also had an increase in expected Chinese production going from 182 million MTs of corn to 184.5 million MTs of corn.

For beans we also found a reduction in average yield to 41.3 but they lowered export expectations by 50 million bu which ended up raising the US carryout guess to 195.  The world carryout estimate also was increased and part of the reason for a continued selloff.

Wheat still shows a massive amount of world carryover with yet another increase in stocks.  They still did not change their feed estimates from 160 even though we feel that number could be closer to 250 when it is all said and done.

Outside markets finished strong with crude oil over $2 higher crossing that 200 day moving average.

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