Opening Grain Market Comments 4-15-11 Tax Day

Markets are called weaker this a.m. behind a weaker overnight session and mixed outside markets.  A little lack of feeding the old crop corn bull is also noted along with overall money flow being an outflow instead of an inflow.

In the overnight session corn was down 8 cents in the old crop, new crop corn was down 2, beans off 6 on old crop, new crop beans down 8 cents, KC wheat was off 4-6 cents, MPLS wheat was off 4-6, and CBOT wheat was off 2-4 cents.

At 9:00 outside markets have European Wheat down, the US dollar is up 202 at 75.08 on the June, crude oil was up 30 cents, and the equity markets have started a little bounce with the DOW up about 45 points.

Some of the headlines today showed that Australia sold 15 TMT of feed wheat to the Philippines, Indonesia, and Malaysia for $320 a tonne; whereas it would have cost $340 a tonne for corn out of India.  Point being that yesterday old crop May corn closed 14 cents more the CBOT Wheat (SRW) as it is quickly appearing that corn is becoming more expensive then wheat both in the US and in the World.  Eventually ECON 101 will fix this but for now it should simply be noted and perhaps add reason for one to thing that wheat should find support at or near these levels.  A few days ago it was reported that HRW was trading less then corn at one of the bigger feed area’s in the US at Hereford TX.

Basis has slowly firmed up and the outlook looks like it should continue as supply is on the slow side while demand has been good; this is generically true for all the grains and especially true for winter wheat, corn, and spring wheat.  The birdseed products like millet, milo, and sunflowers are a little more hit and miss; but the miss part isn’t because of great supply it is more seasonal timing and the recent movement of the board.

Weather in my opinion remains rather friendly for price action; but so far that hasn’t been represented in our markets.  Perhaps it helps explain Dec corn gaining on July corn despite no signs of price rationing.  We also did sell some new crop beans to China this a.m. one of the Country Hedging Commentaries that I listen regularly mentioned that we are about 3 times ahead of bean sales for next year then we where a year ago.  Demand!

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