Allendale Wrap-Up DATE \@ "M/d/yyyy" Feb. 24, 2009
Corn: Outside markets are still a negative for corn. Another steep loss in the Dow pressured crude. For corn fundamentals, we also had a slightly negative weekly export inspection report. 26.4 million bushels of corn were inspected last week which was below estimates of 30 to 35 million as well as last week’s 34.5 million figure.
Soybeans: For South America the current question is whether their short term strike is simply for attention or whether they will dig in their heels, like last year, for an extended period. The strike is set to end tomorrow and farmers will be meeting with a government official. For weather, Argentina is currently a neutral issue. They received rains in the past three days but now have dry conditions forecast through this weekend. On the bear side soybeans, like corn, are still looking at a bearish economy. That pressures energy prices and therefore soybean oil prices. The 10:00 am weekly export inspections release was bearish.
Wheat: This market is still taking its cues from soybeans. We were also reminded today that U.S. wheat is in the back seat regarding world wheat exports. Egypt bought 240,000 tonnes of wheat, all from Russia. We reported last week that Russia would supply some of the shortfall in Argentine production that Brazil depends on. That now makes it Russia and Canada supplying Brazil with little chance for U.S. product. We are not all gloom and doom here though. Today, the Canadian Wheat Board released some larger than expected declines for both Canadian and U.S. 2009 production. They estimate Canadian production would fall by 16% this year and for the US to fall 15%.
Rich Nelson is the Director of Research at Allendale, Inc. in McHenry, IL. Allendale is registered with the CFTC and NFA and is a member of the NIBA. www.allendale-inc.com
