Opening Comments day ahead of USDA Report

Markets are called mixed to weaker this a.m. behind a mixed overnight session that saw a choppy overnight price action and rather weak outside markets from Friday’s unemployment number which was a disappointment.

In the overnight session corn was unchanged after being up about a nickel, beans where unchanged after being up about 13 cents at one point, KC wheat was up about a penny, MPLS off a couple cents, and CBOT was up 2.  At 9:15 outside markets are weak; but they where weak all night; presently the DOW is off 133 points, crude off about 2.00 a barrel, gold is up 15.00 an ounce, European markets are closed, and the US dollar is back to about unchanged.

Weather has put in a little premium with a lot of cold areas that should slow down planting and potential put some risk back on the table.

The other big thing in the markets besides the weak outside markets is the crop report that is out in the a.m.

Below are the Reuters estimates for the report.  You can see that our risk really has to be to the downside given what happened last year when we didn’t see any changes on the corn balance sheet despite the March stocks report that was below estimates and the fact that all the estimates are for reductions to our carryout numbers versus last month.  I don’t know that ethanol numbers or exports have been all that great to think the USDA curves a bunch off of the numbers they have out there.

TABLE-USDA April stocks/world crop production - RTRS                      05-Apr-2012 11:22
    April 5 (Reuters) - This table is provided to Reuters clients as a convenience before the U.S.D.A's April crop production reports on Tuesday.
    U.S. ending stocks data are quoted in billions of bushels.
    The world production figures are quoted in millions of tonnes.
    The 2011/12 marketing year for wheat began on June 1, 2011, and will end on May 31, 2012. For corn and soybeans, the 2011/12 marketing year began on Sept. 1, 2011, and will end on Aug. 31, 2012.
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                   USDA 2011/12 U.S. grain and soybean ending stocks  
  
  
           USDA April       Average of      Range of         USDA March 
             2011/12        analysts'       analysts'          2011/12      
            end-stocks      estimates       estimates         end-stocks    
            estimates                                         estimates     
  
  
Wheat        _____           0.792          0.720-0.825         0.825  
Corn         _____           0.721          0.626-0.812         0.801  
Soybeans     _____           0.246          0.214-0.300         0.275  
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                 USDA 2011/12 global grain and soybean ending stocks  
  
  
           USDA April       Average of      Range of         USDA March  
             2011/12        analysts'       analysts'          2011/12      
            end-stocks      estimates       estimates         end-stocks    
            estimates                                         estimates     
Wheat         ______        208.621      207.000-209.660       209.580 
Corn          ______        122.449      119.000-126.000       124.530
Soybeans      ______         55.417       52.600-58.000         57.300
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Don’t forget we are still offering free delayed price for corn, spring wheat, and winter wheat.

One thing that is different then a year ago has been the spread price action for corn; the May – July is very strong while last year that wasn’t the case.  Basis and the spreads are both saying something that they didn’t say last year.  Hopefully it means we go higher from here; but it could easily be other components that one isn’t looking at.

Please give us a call if there is anything we can do for you.