Grain Marketing Highlights – April 27, 2012

Carl German, Extension Crops Marketing Specialist; clgerman@udel.edu

Market News Brief
Some analysts believe that corn and soybean acres could turn out to be much larger than indicated in the March 30 planting intentions report. Most would agree that we can go either way from current levels with the caveat being strength in the soybean market and a possibility that old crop corn supply may need to be rationed.

Corn Analysis
The corn market is due for a seasonal rally, particularly for the old crop. However, competing factors have thus far prevented that from happening. Chinese buying this past week provided for a short lived ‘buy the rumor, sell the fact’ rally, only to back off again with the market aiming sights on potentially huge planted acreage for the 2013 crop. On May 10 USDA will issue the next monthly supply and demand report. Feed, export, and corn for ethanol demand will be of interest in determining whether corn needs to bid up in order to ration old crop supply with carryover stocks estimated at 801 million bushels for the current ‘11/‘12 marketing year. The weekly export sales report was viewed as neutral.

Soybean Analysis
The soybean market continues to rally with old crop futures making new highs and new crop futures testing resistance. Reports from the Southern Hemisphere are calling for reductions in previous soybean production estimates. This make the U.S. a major supplier of export needs for the remainder of the marketing year into 2013. USDA will need to confirm South American production estimates in the May report. The weekly export sales report was viewed as bullish.

Wheat Analysis
Chicago SRW wheat futures continue to follow corn even though U.S. and World wheat supplies are bearish with a stocks-to-use ratio of 36.2% and 30% respectively. The Ukraine has nearly cut their production estimate in half from last year leaving their share of the export market to other providers including the U.S. The weekly export sales report was viewed as neutral to slightly bearish.

Market Strategy
Overnight commodity prices are not unlike the levels of a week ago with the exception of soybeans. Dec ‘12 corn futures are currently trading at $5.40; Nov ‘12 soybeans at $13.64 (9 cents higher than last week); and July ‘12 SRW wheat at $6.30 per bushel. Outside market forces and the weather will continue to influence these markets.

For technical assistance on making grain marketing decisions contact Carl L. German, Extension Crops Marketing Specialist.

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