closing grain market comments Monday Jan 23rd; bull markets here we come?
Markets closed firmer for the grains today behind good
demand and weather in SA.
Beans lead the way higher up 30, KC wheat was up 7, MPLS
wheat was up 5, CBOT wheat was 9 higher, corn was up 9, the US dollar was down
430 points, crude up around a dollar, and the equities closed mixed with the
DOW down 12 points. Overall another good
day for the grains; we opened strong last night; firmed up during the session
early, then backed off midsession, and when things where all said and down
closed very firm; near the highs of the day for most of the grains. Technically the picture has turned much more
positive over the past few sessions.
Export inspections at or above trade estimates as well as
what is needed on a per week basis to meet current USDA projections helped show
our recent increase in demand off of the price break. Corn came in at 35.2 million bushels, beans
at 35.7, and wheat at 17.1.
Friday’s commitment of traders report showed the funds at a
record short position in CBOT wheat.
Ideas are we could see some short covering that would lead the feed
wheat to gain a little over our hard wheat’s.
Also it has been noted that we are getting closer to export
business. (About time we where wheat and
US export business in the same sentence.)
Basis in general is firmer across the board; about the only
exception would be off quality wheat and the birdseed market. I have seen an increase in birdseed demand;
but it has been more then meet with sellers; as the past month or two selling
was non-existent.
Railroads are still performing very well and generally have
cars just sitting around. Perhaps longer
term this ends up having a positive effect on some of our markets because I have
seen many asking the railroads for freight breaks to try and take product to
non-traditional outlets. The more of
this that happens now the better the chance is that the “should be buyer” ends
up having to pay more later. At least
that is my view on how it has worked in the past. Along those same lines is we are seeing the
crush sunflower market slowly creep up towards the birdseed market. I felt that the main reason that we seen a
huge rally in the birdseed sunflower market last year was due to the fact that
so many flowers went to the crush at harvest time; way more then normal out of
our area. (that along with good solid
demand and a record snowing winter last year)
I think that birdseed prices probably due struggle until the point comes
that we take some of the overwhelming supply out of the market; when that does
happen it should really open the upside potential just because of the relative
short crop we have in the US. Limiting
that as well as all of the grains will be the massive world supplies. Just one reason not to be afraid to sell a
little bit here and there on these little rallies.
Please give us a call if there is anything we can do for
you.