Carl German, Extension Crops Marketing Specialist; clgerman@udel.edu
Commodity Prices Decline – Temporarily?
News of further banking problems sent non-commercial speculators to the sidelines and commodity prices tumbling this week. Dec corn futures closed at $6.77 per bushel in yesterday’s trading, $1.19 per bushel off of the recent high that was made on June 27th. November soybean futures hit a high mark of $16.35 per bushel on July 3rd and closed at $15.48 per bushel on July 16th. It should be noted that yesterday’s close in Nov futures was higher than the previous day’s close, indicating that the soybean market’s current uptrend may not be over.
Growing conditions in the U.S. Corn Belt continue to improve according to the weekly crop conditions report. Late planting is likely to become an issue nearer the end of the growing season.
Weekly Export Sales Report
Corn
Export sales for the week ending July 14th for both old crop and new crop corn totaled 32.7 million bushels (mb), within and on the high side of pre-report estimates. In the 44th week of the marketing year, export sales for corn are running slightly ahead of the 2.45 billion bushels (bb) needed to stay on pace with USDA projections.
Soybeans
The weekly report indicated combined weekly sales at 3.8 mb, well below pre-report estimates. However, only 2 mb of soybean sales were needed to stay on pace with USDA’s projection for 1.45 bb in the ’07/’08 marketing year.
Wheat
Weekly export sales at 27.5 mb for old crop wheat, accumulated sales for the ’08/’09 marketing year at 390 million bushels, and weekly shipments at 23.7 mb were running ahead of the pace needed to stay on pace with USDA’s projections for wheat exports for both the old crop and new crop marketing years.
Marketing Strategy
Five political issues could have significant impacts upon commodity prices, or not, depending upon the direction that the U.S. Congress takes. They are: energy – specifically the renewable fuel mandates; position limits; margin requirements; conservation reserve program (crp); and import tariffs on ethanol. Further, acting upon a viable U.S. energy policy would greatly impact commodity prices. Nevertheless, at the present time these issues remain undecided. For the moment we can expect extreme commodity price volatility to continue.
For technical assistance on making grain marketing decisions contact Carl L. German, Extension Crops Marketing Specialist.