Wheat
The wheat market started the week slightly higher Jan. 11 with March Chicago Board of Trade bids up 1 cent and moved lower early before rallying into the close of the day. The dollar was sharply lower again and was less than 77 for part of the day, which probably is sufficient explanation for the gains in the wheat markets. Gains of 3 to 6 cents were posted across the three wheat exchanges. The winter wheat contracts were stronger than spring wheat because of expectations that large cuts in winter wheat acreage will be uncovered in the U.S. Department of Agriculture report. Export inspections were disappointing once again.
The wheat market started the session sharply lower Jan. 12 with March Chicago bids down 29.5 cents; prices moved lower throughout the session. Losses of 30 to 35 cents were posted across the three wheat exchanges as sell stops triggered continued liquidation by specs. The biggest shock in the USDA report was the 6 million-acre (or 14 percent) cut in winter wheat acres, but that bullish piece of news was overshadowed by the bearish supply-demand numbers. U.S. ending stocks hiked from 900 million bushels to 976 million bushels, while world ending stocks went from 190.9 million metric tons to 195.6 million metric tons. The U.S. stocks-to-use ratio of 48.6 percent is extremely high, so there is plenty of room for a 14 percent cut in winter wheat acres.
The wheat market started the day Jan. 13 in line with the overnight trade as March Chicago prices were down 6.75 cents. Trade continued lower early in the day before all of the commodities began to slowly creep upward. Gains of 1 to 3 cents were posted across the three wheat exchanges. The wheat markets followed the row crop markets, and there was little direction from the outside markets. Fundamental influence on the wheat market is mixed. The estimated winter wheat acreage of 37.1 million is the lowest since 1913, while poor exports have us on pace to record the lowest annual export number in 40 years.
The wheat market started the day Jan. 14 with March Chicago prices down 5.25 cents. Trade continued even lower at midday before closing prices of 7- to 10-cent losses were posted across the three wheat exchanges. Exports were poor for wheat again, which gave the noncommercial traders further reason to continue selling this market. On the flipside, there has been some spread trading to support wheat vs. corn because of the sharply lower winter wheat plantings.
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Corn
The corn market opened slightly lower with the weakness in the crude oil market. The market was trading with 3- to 4-cent losses by midsession, but came back to close down 0.5 cent. The market traded in a very small range ahead of the USDA supply and demand report. There also was some profit taking and squaring up of positions. The weekly export inspection report was seen as bearish to add additional pressure.
The corn market opened Jan. 12 limit down (30 cents) in the front months and, by the end of the day, the first nine corn contracts were limit down, all the way to September 2011. The USDA supply and demand report was not friendly, and news of this report drove corn lower. USDA came in with a record 13.15 billion bushels (12.92 estimated in December 2009) of corn produced on 79.6 million acres, with an average of 165.2 bushels per acre (4.9 bushels per acre more than the record yield of 2004 and up 2.3 bushels from the November report). Corn ending stocks are expected at 1.764 billion bushels, up 90 million bushels from the December estimate. USDA said this would not be its last supply and demand report for 2009 production because of the late harvest and that it may adjust these numbers in the March 10 report.
The corn market opened 20 cents lower Jan. 13 with the lower overnight market and carry-over selling from yesterday. By midsession, the market firmed up with short covering and ended the day with 8-cent losses. Jan. 13's performance was impressive when you think about what the report stated and how the market reacted the day before. The strength in the soybeans also helped support the corn market.
The corn market opened 6 cents lower Jan. 14, bounced around in negative territory for the session and closed with 3-cent losses. Corn closed the day at nine-week lows. The market traded with losses all session with a poor export report and the bearish report from Jan. 12. The outside markets gave the commodities no direction Jan. 14.
Corn was trading lower once again with 7-cent losses by midday Jan. 15. Noncommercial traders continue to liquidate their long positions, while commercial buying has picked up this week because of cheaper corn. There is support at $3.6375 for March, so holding above that level would be one good sign for the week ahead.
Soybeans
The soybean complex started the session Jan. 11 with the March contract up 1.5 cents, but quickly moved lower. Trade continued lower on carry-over selling and posted closing prices down 8 to 12 cents. Outside markets mostly were supportive, but did little to help the struggling soybean market as soybeans once again performed poorly compared with corn and wheat. Export inspections were good once again and the Chinese stock markets had a good day, but the impending South American crop continues to loom over the soybean market.
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The March contract opened Jan. 12 with 22.5-cent losses and quickly moved to 30-cent losses. Trade continued mostly steady on pressure from the corn market and the bearish USDA report and closed with 25- to 32-cent losses. The USDA report was not terribly bearish for soybeans, but the market still came under intense pressure because of the limit-down corn market and the triggering of sell stops. Another bearish factor is that the sharply lower winter wheat acres likely will mean more soybeans (and corn) in 2010. Domestic numbers mostly were neutral with ending stocks reduced 10 million bushels from the December estimates to 245 million bushels, a result of a 0.7 bushel-per-acre yield hike compensated for by a 35 million-bushel jump in exports and a 15 million-bushel rise in domestic crush. World numbers were more bearish with world ending stocks of 59.8 million metric tons, up from the December estimate of 57.1 million metric tons and last year's 42.9 million metric tons. Soybean production in Brazil was estimated to be 65 million metric tons, up from 63 million in December and 57 million metric tons last year.
The Jan. 13 session started with the March contract down 5.5 cents but had mixed trade by midday. An additional spurt of buying at the end of the session had closing prices up 9 to 14 cents. Soybeans broke through some substantial support Jan. 12, but were able to lead the way to the upside Jan. 13. Domestic fundamentals still look good for soybeans in the near term, but the worldwide situation is growing more bearish with stocks-to-use approaching 25 percent.
The soybean market started the session Jan. 14 with the March contract down three-quarters of a cent but had sharply lower trade by midday. Prices firmed slightly by the end of the session with closing prices down 8 to 15 cents. The soybean market had good fundamental news regarding export sales and domestic crush, but the continued selling pressure from noncommercial traders overpowered any fundamental strength. Export sales were well above what was needed for the week, and the December crush estimate of 164.4 million bushels was above December's crush of 160.3 million bushels and well above the 134.8 million bushels that was processed in January last year.
Barley
Cash bids for feed barley in Minneapolis were 10 cents lower on the week at $2.50, with malt bids down to $3.40 in Minneapolis. USDA reported no barley export shipments or sales for last week. That brings the year-to-date export shipments pace for barley to 2.45 million bushels compared with 10.5 million bushels for the same time last year.
Durum
USDA reported last week's export shipments pace for durum at 692,000 bushels with 533,000 bushels going to Italy.
There were no new export sales for durum this week. Ending stocks for durum are projected to be 40 million bushels, up 60 percent from the previous year.
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Canola
Canola futures on the Winnipeg, Manitoba, futures exchange lost around $16 on the week from pressure from the lower soybean complex and oil markets. The USDA Jan. 12 report was bearish for most commodities, with canola feeling pressure from a small rise in production and an increase in farmer selling. March was trading around $383 (Canadian) on during the Jan. 15 session. Cash canola bids in Velva, N.D., were at $16 on Jan. 14.
Sunflowers
The latest USDA report pegged the 2009 sunflower production at 30.36 million hundredweight, down from 34.23 million hundredweight in 2008. The Risk Management Association has released the Multiple Peril Crop Insurance price elections for 2010 with oils at $15 and confections at $18. Last year's price elections were $20.35 and $23.35, respectively. Cash sunflower bids in Fargo, N.D., were at $13.45 Jan. 14.
Dry beans
USDA has estimated the 2009 U.S. pinto bean crop at 10.9 million hundredweight, up 6 percent from 2008, while North Dakota pinto production is down 11 percent. U.S. navy bean production of 3.3 million hundredweight is down 27 percent from 2008, including a 40 percent drop in North Dakota. Black turtle bean production is up 2.5 percent in the U.S.
