February 11th, 2013
Drew Johnson, Grain Originator
Corn as of 7:00am. Mar. 2 lower, Dec. 2 lower.
We are seeing some continued selling this morning after last weeks USDA report. The corn numbers came out to somewhat as expected.Trade increased the carry out to 632 mln bu vs 602 last month. World supply is also up. Decrease in exports of 50 mln bushels was offset by 20 mln bushels that will be used for food consumption and seed. Both feed and ethanol stayed the same. Brazil's corn crop was up 1.5 million metric tons and Argentina's corn was down 1 million metric tons. This market seems like it is going to have a tough time moving back higher in the short term as we see futures slowly drifting closer to the $7 mark. If continued dryness persists into spring and by chance we see some run up in soybeans, due to planting intentions, this might be the next time we get a run up on old crop corn. As for new crop corn. We still see it holding above the $5.50 range. This to could creep higher if dry US weather persists.
Soybeans as of 7:00am. Mar. 16 lower, Nov. 13 lower.
Soybeans were somewhat a surprise as we still continue to see contacts being sold this morning. Weather forecasts in Brazil and Argentina are seen as favorable in the next 6-10 day period. The numbers last Friday would have been construed as bullish is most cases. US domestic crush numbers were up 10 million bushels, which in turn lowered the carry out number. The disappointment came with the export numbers. Many figured there would be an increase as China continues to import US beans until the South American harvest gets fully underway. World ending stocks also increased. This would suggest that South America will have a crop that will curb enough demand to meet world needs. It might become very hard for the old crop price to get back to $15, in the short term,if there is truly enough soybeans in the world.The wild card with be South American logistics. Will they be able to export enough soybeans in a timely manner? We shall see.
Wheat as of 7:00 am Spr. Wheat 2 lower. Win. Wheat unchanged.
Wheat also trading a little lower today. The numbers from Friday's report had feed wheat use up 25 million bushels, which intern refused US ending stocks by the same amount. World stocks remained relatively unchanged at 176.73 million metric tons. Export numbers were held steady. Wheat markets to continue to price weather and export sales as new crop starts to get on traders minds. Short crops in Australia an Argentina could provide some opportunities for US wheat to be competitively priced.