June 20, 2012
Producer Marketing Manager
Corn: As of 7:40 Old down 5, New down 12
Three things seem to be the main factors affecting the grain markets the past couple days: Weather (Rain chances), Weather(soil moisture), and Weather(Hot Temps)! Yesterday the corn market followed thru on the lower crop conditions and dry weather forecast to post gains of $0.29 on the Dec and $0.13 on the July contract. We have seen some rain accumulations in the Dakota’s and especially Minnesota the past couple of days. Short term forecasts show more rain chances for the NW Cornbelt into the weekend, but still not much relief for the Eastern areas like IN, OH. On the demand side, we are seeing a large Brazilian corn crop priced at a discount to US corn, thus tempering old crop exports from the US. Also note that ethanol margins and high corn basis have some rumblings on plant slowdowns or temporary shutdowns.
Soybeans: As of 7:40 Up 2 Old, Down 5 New
Yesterday’s rally of $0.45/bu propelled the November futures back up to the $13.95-13.97 area that we have bumped up against about 3 times since late March. Another noteworthy item was the announcement of a sale of 140,000 MT of old crop soybeans to an unknown destination yesterday, keeping the “foot on the gas pedal” on the July contract that was also up $0.495 yesterday. Like corn, weather is the main driver this week. I am still looking at pretty decent resistance at that $14.00 area on the November contract.
Wheat: As of 7:30 Mpls down 6, KC down 10
Harvest is progressing northward at a swift pace. Australian wheat stocks fell 16% in May, reflecting higher exports. Some in the trade are thinking that world wheat production is down 10MMT on lower Russian production estimates.