opening comments 2-24-12 grain markets
Markets are called mixed to weaker this a.m. behind a choppy
to weaker overnight session.
In the overnight session CBOT wheat was off 5-6 cents, MPLS
was down 4, KC was off 5, Corn was off 3 cents, and beans where unchanged to up
a penny. At 9:15 outside markets have
the dollar under pressure down 565 at 78.257 on the cash index, equities are
firmer with the DOW up 26 points, and crude is up 60 cents.
Yesterday and today the USDA is having their Outlook Forum;
this has pressure us a little bit. Many
don’t put much into these numbers; but their isn’t much else to trade
either. The big news yesterday was wheat
acreage up to 58 million a big increase from last year and from baseline
projections. This put their 2012-13
ending wheat stocks at 957 million bushels, versus 887 in their baseline
projection and 845 currently.
Corn carryout is pegged at 1.616 billion bushels; more then
double the current market year. One interesting
fact is that the USDA used yields slightly above trend line yields in both corn
and beans.
Beans had carryout projections for 12-13 at 205 which is a
cut from the current 275.
Export sales where out and all grains came in above what is
needed on a per week basis to meet current projections. Overall most where in line with trade
estimates and probably not a big market mover.
China buying some corn yesterday still could lead to some support.
Basis remains defensive up front but deferred slots are
showing strength for wheat. It shows
that we don’t have anyone really looking for anything up front as we really
lack export to domestic competition for wheat right now. Corn basis is still hit and miss; many local
ethanol plants have good coverage and margins are a struggle.
One positive our markets have is the fact that basis is
above delivery values; one of the first times in a long time so this should
lead to some support. Bottom line is
producers don’t have much interest moving until we see a rally. Add to that fact that spring is coming
shortly and we probably don’t see basis under much pressure until producers
start moving some grain.
Please give us a call if there is anything we can do for
you.