Early Market Talk

Extremely thin “Holiday” type volume so far overnight underscoring the lack of fresh market news. At 0600 just over 13K corn and 8K soybeans have traded. CH19 trading $0.01 ¾ higher at $3.80 ¼ with SH19 up $0.01 ¼ at $9.04 ¾.

Dow futures a scratch higher at 23,874. Crude $0.46 higher at $50.98.

Weekly NOPA crush report later this morning. December crush estimates range from 167.8 mln to 172.1 million bushels.

Bottom Line on Brazil weather forecast this morning has GFS model trending drier in C-W Brazil for the 6-10 day. Both GFS and Euro models shifting wetter in N. Argentina in 11-15-day vs 24 hours ago.

Trade continues to debate acreage mix for the upcoming growing season. While most want to plug in a bean acreage loss in the 7 to 8 mln acre range it’s debatable if not unlikely current market conditions will get the job done.

Last time we saw that big of an acreage shift was in ’07 when we needed corn acres as ethanol production was ramping up. Soy/Corn ratio then was under the 2.0 mark. This morning the ratio stands at 2.38.

SNSX hit 16 ¾ yesterday challenging the 17-cent level set December 27th. SNSX last year hit 25 and the absolute best carry was seen back in ’07 at 35 ½. Quick historical look at this spread finds most of the widest levels posted in June.

Merchants Plus second round of marketing pool sin-up ends February 25th with pricing beginning on March 1st. Both and aggressive and conservative pool available for corn and soybeans.

Record overall US corn demand forecast at 15,030 combined with 16 cent carry to CN keeps basis outlook firm. Some 10 – 15 cent basis pushes not uncommon at select end users.

Quiet session expected with trade searching for a fresh story…

Written by:

Bruce Nelson