November 26th 2012
Drew Johnson
Grain Originator

Corn at 7:50 am Dec. up 5 Dec. ’13 up 3

Brazil and Argentina received rain. Brazil still dry, Argentina is to wet. U.S. drought intensifying into most of the plains and western corn belt. Funds long 300,000 contracts. Trade waiting for the November 30th deadline for EPA to set the 2013 renewable volume obligations for biofuels.

Soybeans at 7:50 am Jan up 8 Nov ’13 up 5

Western hemisphere soy stats show some demand slowdown with hemispheric use down 3 mmt from last year. With US soy crop 9 mmt larger today than what was believed in September and now some evidence of demand rationing or slowing, the trade is confronted with important incremental shifts in perceived supply and demand tightness. U.S March soy stocks will be record tight, but the 12 mmt shift in supply and demand from that seen earlier moves the US soy stocks situation into a more comfortable situation. US ending stocks, near 800 mln bu versus 1.37 bln last year, will only cover minimum domestic crush in the second half of the US year and allowing only 100 mln bu of soybean exports which normally are 500 mln bu. Can China demand scale back significantly March thru August if South American cannot execute the record demands on their logistics system, which are already plugged with corn shipments, without bidding up for the remnants of US supplies? Time will tell

Spr. Wheat at 7:50 am up 5 Win. Wheat at 7:50 am up 6

Winter wheat emergence is still behind. Drought extending through the spring wheat country making trade worry about spring planting.