[Farmmarketnews] Seamus Hoban Grain Commentary

[Farm Market News - Ontario Commodity Report]

Wednesday, September 22, 2010

Commodity
Period
Price  
Weekly Movement

Corn CBOT
Dec.
5.0500
↑
9 3/4
cents

Soybeans CBOT
Nov. 
10.8850
↑
46    
cents

Wheat CBOT
Dec.
7.1975
↓
7    
cents

Wheat Minn.
Dec.
7.6400
↑
5 1/2
cents

Wheat Kansas
Dec.
7.5625
↓
3 1/2
cents

 
 
 
 
 
 

Canadian $
Dec
0.9708
↓
8
points

 
 
CORN
Corn finished higher as large amounts of fund capital are reportedly flowing
into agricultural commodities, particularly corn. Funds are estimated to be long
487,000 contracts of corn with total open interest not far from the record
levels of 2008. 
 
The market is starting to see the first clear signs of demand rationing.
Ethanol blending margins are now at zero even with the 45 cent blenders credit.
At this level ethanol production could be reduced to the minimum level required
by the mandate. This could cut corn demand by almost 200 mln bu per year. The
trade is also considering the possibility of the blending credit expiring on
January 1 2011, generating massive losses. 
 
SOYBEANS
Soybeans rallied strongly during the week, as China experienced some frost
damage prompting panic buying and concerns linger about South American weather.

 
Values were also supported by the possibility of intense competition between
corn and soybeans for 2011 acres. Even with a larger US crop this year, surging
demand may prevent soy from relinquish any acreage to corn next year. Cotton is
now also competing for acreas, on account of recent price gains.
 
With record demand, any legitimate weather threat in South America would be
explosive. At the same time, US soy yields are clearly record exceeding previous
levels by huge margins. 
 
WHEAT
Wheat had a mixed week. Concerns about the frost in Western Canada were
eclipsed by weather forecasts providing Prairie growers with much needed dry
weather to enable harvesting. Forecasts also point to more rain in the Former
Soviet Union to enable planting. 
 
Cumulative US exports are up 30% from last year with USDA forecasting annual
exports up 36%. The trade appears undecided about short-medium term prices with
more than adequate US stocks seen but growing world tightness this year and
likely again next.
 
US winter wheat is now 18% planted vs 21% average. Meanwhile Russia has planted
8.1 million hectares vs 11.2 last year. 
 
Contract prices for September 22nd, 2010 at the close are as follows:
SWWat $219.27 per tonne ($5.97/bu.), SRW at $202.00 per tonne ($5.50/bu.), HRW
at $226.16 per tonne ($6.17/bu.), and HRS at $234.06 per tonne ($6.37/bu.).
 
Chart of the Week 
 

 

John Jordan
Editor, AgriLink and Farm Market News
University of Guelph, Ridgetown Campus
Tel. 519-674-1500 x 1577

Fax. 519-674-1530
E-mail: jjordan at ridgetownc.uoguelph.ca 
AgriLink website : www.ridgetownc.com/agrilink 

-------------- next part --------------
An HTML attachment was scrubbed...
URL: <http://lists.sentex.ca/pipermail/farmmarketnews/attachments/20100923/057fb239/attachment-0001.html>
-------------- next part --------------
A non-text attachment was scrubbed...
Name: wheatcom.docx
Type: application/vnd.openxmlformats-officedocument.wordprocessingml.document
Size: 321447 bytes
Desc: not available
URL: <http://lists.sentex.ca/pipermail/farmmarketnews/attachments/20100923/057fb239/attachment-0001.bin>
-------------- next part --------------
A non-text attachment was scrubbed...
Name: wheatcom.pdf
Type: application/pdf
Size: 262892 bytes
Desc: not available
URL: <http://lists.sentex.ca/pipermail/farmmarketnews/attachments/20100923/057fb239/attachment-0001.pdf>
-------------- next part --------------
An embedded and charset-unspecified text was scrubbed...
Name: wheatcom.txt
URL: <http://lists.sentex.ca/pipermail/farmmarketnews/attachments/20100923/057fb239/attachment-0001.txt>