Corn, soybeans, and wheat put in a mixed performance and closed near unchanged. Buying supported the overnight market on ideas that yesterday's losses in corn and wheat were overdone. Yet, prices quickly resumed their downtrend for the week and did not trade back to unchanged and higher until buying into the close. Crude oil traded sharply higher, while the dollar traded higher early, but lower at midday. These outside influences along with fund movement will continue to play a major role leading up to the next USDA report on March 10th. So far this week soybeans have seen the most support thanks to the tight ending stocks and buying in soyoil. It is believed that the biodiesel credit will try and be added to the new Jobs bill. Without the credit crushing margins are poor. Meanwhile, soymeal has not seen the strength as increased DDG feeding is taking its share from meal. This should be an ongoing theme into 2010 as ethanol production increases.
It appears that last week's rally came with additional farming selling as river basis broke sharply at the end of the week. A need to move additional corn from the bins will keep a lid on corn prices. We continue to recommend that you are caught up on new crop sales. Speculation about the potential for a friendly March 10th report has provided the market with a solid rally. We caution that some may be too optimistic about this report. The optimism comes from thoughts of decreased supplies due to late harvested corn. However, we do know that exports are well behind current USDA projections to discourage friendly thoughts. Yet, if you are concerned about corn posting further rallies it may be a good idea to buy April ....
Using the February average of the closing new crop futures prices the CRC, RA, and GRIP insurance policies are now set. The average price for corn in February was $3.98 ½ and the soybean price was $9.22 ¾. This price guarantee is just one of the factors that producers will have to consider when deciding acreage and insurance coverage levels. We encourage you to contact your insurance representative and please call us if you have any questions.
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