Mish's Global Economic Trend Analysis Message Board

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Strategies & Market Trends : Mish's Global Economic Trend Analysis

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To: mishedlo who wrote (25184)	3/9/2005 10:20:03 AM
From: russwinter	Read Replies (3) of 116555

Farmers out in the marginal dry corn belt, might as well but the tractor away this year, and work on fallowing. Wonder if China might need lots of imports this year: Message 21112775 Pre-Opening Corn Market Report for 3/9/2005 May corn was up 3/4 of a cent in overnight trade. March deliveries for corn were 37 contracts this morning. While traders came in to the year thinking that planted acreage for upcoming season would be up 2-4 million acres from last year, the $1.37 rally in the soybean market and $55.00 crude oil prices could slow the expansion ideas. While high energy prices are supportive for ethanol usage, fertilizer costs are up sharply and diesel prices are up nearly 50% from last year. The supply/demand report for Thursday morning is expected to show another adjustment lower in old crop corn exports, which could add nearly 50 million bushels to the ending stocks forecast that was already up to 2.01 billion bushels last month as compared with 958 million bushels last year. Competition from China and Argentina has been more significant than expected. Funds were noted buyers of nearly 2000 contracts yesterday, as funds seem to be buying nearly any commodity due to inflationary fears and as a hedge against a collapsing US dollar. South Korea bought 110,000 tons of optional origin corn overnight. The early weakness yesterday was seen as corn followed the soybean market lower. Commercial selling emerged on the rally to limit the upside in the market in spite of strong gains in the other grains. Trade sentiment remains bearish toward the export pace with traders looking for another 25-50 million bushel decline in the USDA export forecast for Thursday's USDA supply/demand report. However, recent export news has come in with a bullish tilt. Taiwan bought 60,000 tons of US corn in their tender for 30,000-60,000 tons of corn from the US or Argentina. In addition, Japan bought 140,208 tons of US corn.

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