Grain Marketing Highlights – June 8, 2012

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

Commodity Markets Remain in a Highly Volatile Situation
Corn, soybean, and wheat futures prices have struggled this week to regain some of their recent losses that were brought on by poor performance in the equity markets. However, the tone changed somewhat in Wednesday’s trade with rumors abounding throughout the European and U.S. economies about possible actions that might be taken in the Euro and U.S economies. In the U.S. the Federal Reserve Chairman, Ben Bernanke, spoke today with the markets said to be anticipating some type of action in order to bolster the economy. Just what might be done, if anything at this point in time, is not known since no specifics were given. Meanwhile, dry conditions in the Eastern Corn Belt continue to provide support to commodity prices.

USDA Export Sales Report 06/07
Pre-report estimates placed d weekly corn export sales at 15.7 to 31.5 million bushels. Total export sales were reported at 15.7 million bushels with 9.9 million bushels scheduled for ‘11/‘12. This was below the 14 million bushels needed this week to stay on pace with USDA’S demand projection of 1.7 billion bushels. Weekly shipments of 28.9 million bushels were below the 37.1 million bushels needed this week. This report was viewed as bearish.

Pre-report estimates for weekly soybean exports ranged from 18.4 to 36.7 million bushels. Total export sales were reported at 18.2 million bushels with 8.1 million bushels scheduled for ‘11/‘12. Year-to-date sales are now at 1.336 billion bushels, above USDA’s export projection of 1.315 billion bushels. Shipments of 16.2 million bushels were above the 13.4 million bushels needed this week. This report was viewed as bullish.

Pre-report estimates for weekly wheat exports ranged from 11 to 18.4 million bushels. The final weekly report of the ‘11/‘12 marketing year placed old-crop export sales at 1.1 million bushels. This puts year-to-date sales at 1.026 billion bushels. USDA’s export demand projection for U.S. wheat in the current marketing year was 1.025 billion bushels. However, weekly shipments of 19.5 million bushels were well below the 66.2 million bushels needed this week to reach USDA’s target. This report was viewed as bearish.

Market Strategy
The next USDA Monthly Supply/Demand report will be released on Tuesday, June 12th. It will be followed by the Planted Acreage report to be released on June 12th. In the event that huge acreage increases for U.S. corn and soybean production are confirmed, possibly above the March 31st Planting Intentions numbers, we could see new crop prices (particularly for corn) moving much lower than current levels. In order to take prices higher from current levels we’d likely need to see a weather scare occur this summer in the Corn Belt.

Currently in e-trade, Dec ‘12 corn futures are bid at $5.28; Nov ‘12 soybeans at $13.27; and July SRW wheat at $6.36 per bushel. Last week it was suggested that one might want to ride the weather market before advancing new crop corn and soybean sales. A weather market could continue to help in bringing on better pricing opportunities. However, it might be wise to consider taking some protection on remaining sales needs.

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

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