January 11th 2012
Drew Johnson
Grain Marketing Specialist

January Supply/Demand Report out 11:00 am. In the past 6 years the January report has been volatile producing limits up and down, with the last 3 out of 4 being lower. In addition to the supply and demand report the USDA also issues 2012 crop production numbers, Dec 1st grain stocks and winter wheat seedings.

As of 7:45 am Mar. unchanged, Dec. unchanged

Corn continued to show positives yesterday and this morning we see traders stay relaxed as we head into the report. Traders expecting lower stocks and higher feed use. Will that be offset by pathetic export numbers? We shall see. Climate Prediction Center update shows a neutral La Nina-El Nino weather pattern. Ongoing drought is still a concern. Expect volatile trade when report comes out. Support at $6.80 futures.

As of 7:45 am Mar. 9 lower, Nov. 4 lower

Soybeans lower on the over night, even with new sales to China on old crop and new crop beans. Weekly export sales are behind 321,000 versus 424,000 last year. Some suggest demand switching to South America as we see bearish seasonals starting to show their face in this market. Will South America be able to handle extreme demand? USDA not expected to reduce its estimate of 2012 production and little change in ending stocks. There may be a silver lining. US stocks are still predicted to be tight and with total sales and crush numbers being way ahead of the pace the USDA has set forth, there may still have to be some rationing into the spring months. Time will tell. Key support is around $13.65 futures.

As of 7:45 am Spr. Wheat a penny lower and Win. Wheat 2 higher.

Pressure remains on the wheat even with Egypt buying 55,000 tons of US soft red wheat; however Egypt also bought 60,000 tons of Canadian wheat. That is a little bearish in the traders’ eyes.  Weekly exports sales at 233,000 tons versus 365,000 tons this time last year. Traders predict USDA to come in around 42.7 million acres. Even with the recent rains weather forecasts still place a good portion of the HRW belt in dry conditions. Support around $8.38 for spring wheat and winter wheat is holding its own around $7.96 futures.