Wednesday, December 15, 2010 Commodity Period Price Weekly Movement Corn CBOT Mar. 5.8425 ? 9 3/4 cents Soybeans CBOT Jan. 12.9650 ? 8 1/2 cents Wheat CBOT Mar. 7.6475 ? 19 1/4 cents Wheat Minn. Mar. 8.4275 ? 20 cents Wheat Kansas Mar. 8.1500 ? 22 1/2 cents             Canadian $ Mar. 0.9942 ? 10 points CORN Corn futures finished slightly higher for the week as US ethanol production continues to run above USDA estimates. This Friday’s Informa report will give the market a clearer idea of 2011 acreage. Their last report estimated US planted acreage at 93.1 million compared with estimates from the USDA (88.2 million) and FC Stone (90.3 million). Combined US corn and soybean plantings must expand an unprecedented 7 to 9 million acres to satisfy demand in both markets next year. The market is generally resigned to the fact that this target will not be met, however it remains to be seen how the shortfall will be divided among the two crops. The US faces an extremely tight S&D situation this year and again next. The trade fears dramatic old crop tightness with ending stocks at or below minimum pipeline levels. The trade will be looking for USDA to increase corn use for ethanol estimates in subsequent monthly S&D updates. Funds continue to hold a record 440,000 contract long position in corn futures. SOYBEANS Soybean futures lost some ground this week. US soybean exports to China remain strong, however Chinese crush margins are under pressure as the government attempts to cap vegetable oil prices in response to broad concerns about food price hikes. It remains to be seen how effective the price caps will be, as world vegetable oil prices continue to move higher despite the intervention. This will put pressure on the Chinese Government to raise price limits. Informa will estimate new crop soy acreage on Friday morning. Informa’s November estimate was 75.8 million however the December estimate is based on grower surveys and will therefore be significantly different. Informa will also estimate 2010 final production; their November estimate was a significant 50 million bushels above USDA’s November forecast. If this discrepancy remains, concerns about old crop tightness will be tempered slightly. The trade is noting much improved US soyoil and soymeal yield in recent crush statistics. Oil yield was up 4% from a year ago with meal yield up 1.7%. Still private analysts continue to project an annual crush exceeding current USDA forecast to further tighten stocks. WHEAT Wheat futures continued to drift lower this week. The trade is receiving mixed messages about the harvest situation in Australia, with additional rain forecasted however increased harvest activity in some areas. Meanwhile the Australian Government forecaster remains confident that the bumper crop will be harvested. This week it surprised the market by projecting 2010/11 wheat exports at 16.6m tonnes, amazingly up 21% from last year. Meanwhile record high temperatures were reported in parts of Texas during the week, 20 to 25 degrees above normal with drought conditions expected to continue through next week. US wheat exports have been strong in recent weeks with Egypt and Jordan making large purchases. However traders still remain concerned that overall US export pace is inadequate to reach the USDA’s annual forecast, with some looking for the USDA to lower export forecast in upcoming S&D reports. Contract prices for December 15th, 2010 at the close are as follows: SWW at $254.87 per tonne ($6.94/bu.), SRW at $256.71 per tonne ($6.99/bu.), HRW at $275.19 per tonne ($7.49/bu.), and HRS at $279.99 per tonne ($7.62/bu.). Chart of the Week Ontario Grain Market Commentary for December 16th, 2010 By Seamus Hoban, Grain Farmers of Ontario