[Farmmarketnews] Todd Austin Grain Commentary

Wed Mar 30 16:19:47 EDT 2011

Wednesday March 30, 2011

Commodity
Period
Price  
Weekly Movement

Corn CBOT
May. 
6.63 ¼  
↓
17 ¾       
cents

Soybeans CBOT
May.
13.72 
↑
20 ¾     
cents

Wheat CBOT
May. 
7.27 ¼  
↑
13    
cents

Wheat Minn.
May. 
8.86
↑
41      
cents

Wheat Kansas
May. 
8.62 
↑
17    
cents

Canadian $
Jun. 
1.0278 
↑
98 
points

CORN
Given that corn and soybean carryout are at some of the tightest levels in
recent history, the trade is anxiously awaiting the USDA planting intention
report.  Where will the acreage play out; larger corn acres, larger soy acres,
or both.
Since the U.S. does supply much of the world’s corn, this acreage report is a
key indicator of where the market may head this year. Soybeans, on the other
hand, have an opportunity to plant more acres in South America if the U.S.
numbers come in low.
In addition to the acreage numbers, how the trade - both buyers and sellers,
react to the report that will be of interest to producers. If corn acreage is
below expectation will buyers get aggressive early to lock in volume?
Conversely, will a larger acreage allow buyers to hold off, in hope of buying
into lower prices in the future?
SOYBEANS
The soybean market has been consolidating ahead of the USDA report on the 31st.
Prior to Thursday's report, too much rain in parts of Brazil, plus some
improvement in outside market factors have pushed the market moderately higher.
Analysts attribute the moderate decrease in soybean acres to farmers expanding
the amount of land devoted to corn and cotton. This is driven primarily by
economics, as farmers look to take advantage of the larger profit margin netted
from the other crops. The trade is also expecting cotton to steal from soybean
acres more so than from corn acreage in the Southern U.S.
In the near term it is not necessarily demand driven, but rather a function of
supply and the Thursday acreage report will address that. The acreage numbers
will give us a starting point; however, any improvement on carryout stocks will
certainly be closely linked to production levels. The weather will also be a
huge factor this year.
WHEAT
Crop conditions deteriorated last week in Oklahoma and Texas due to persistent
dry weather. The U.S. Agriculture Department says 56 percent of the winter wheat
crop in Texas is in poor, to very poor condition in early March. Oklahoma fared
slightly better with 41 percent of the crop in poor, to very poor condition.
Meanwhile, the Kansas Agricultural Statistics Service said this week that 37
percent of the crop was in poor, to very poor condition.
Kansas City values are gaining on Chicago, due to relative supply demand
fundamentals between the drought affected U.S. HRW and generally favourable SRW
production prospects. A sharply smaller crop, due to drought, this year will
find U.S. HRW ending stocks plunging to near record tightness.

Current contract prices for March 30, 2011 at the close are as follows:
SWW at $242.10 per tonne ($6.59 /bu.), SRW at $240.31 per tonne ($6.54 /bu.),
HRW at $256.40 per tonne ($6.98 /bu.), and HRS at $306.72 per tonne ($8.35
/bu.).

John Jordan
Editor, AgriLink and Farm Market News
University of Guelph, Ridgetown Campus
Tel. 519-674-1500 x 63577
Fax. 519-674-1530
E-mail: jjordan at ridgetownc.uoguelph.ca 
AgriLink website : www.ridgetownc.com/agrilink 
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