August 3, 2012
Producer Marketing Manager
Corn: As of 7:50 – Down 1
The corn market closed around a nickel lower yesterday as we saw outside market forces weighing on commodities. The dollar rallied and put pressure on commodities when European officials gave no solid indications of plans to solve their debt crisis during their press conference yesterday. On the demand side of the equation, exports were low yesterday with the exception of a large sale to Mexico for both this new crop (39 million bu) and 2013/14 crop year (21 million bu). This was the largest one day sale since 1991. Basis levels continue to be sluggish as we are starting to see some new crop supplies out of the south make their way into the marketplace and low water levels on the Miss are keeping freight rates on the rise. Technically not much has changed since yesterday as we hover around that $8 mark on the December contract.
Soybeans: As of 7:50 – Down 1
Yesterday the soybean market led the market lower as we closed down 12 cents on the day. We had export sales reported yesterday at another 7.1 mbu for this crop year, although new crop sales were reported at just 1.9 mbu. China sold 400,000 MT of soybeans out of state reserves to their domestic crushers. The sale price to the Chinese crusher was still 8% less than the price they could pay for imported soybeans.
Wheat: As of 7:30 – Mpls Up 5, KC Up 5
Harvest continues to roll across the northern plains and into the western Canadian provinces with good yields reported. Continues to keep an eye on any developments out of the Black Sea to see if Russia places restrictions to exports as they did very suddenly in 2010. If you remember they had wildfires raging and smoke engulfing Moscow when their decision was made in 2010. Without that dramatic flair this year it will be interesting to see what they do. Otherwise follows corn.
What to watch for: Informa's August estimate is out this am, USDA Supply/Demand report is out next Friday, Aug 10th.