We look for butter futures to open steady/mixed.
Grain prices traded sharply lower overnight Sunday and had recovered slightly by the time the electronic market closed Monday morning, but when the market opened Monday prices again dove double digits and hit new daily lows. Corn dipped as much as 19 cents, beans as much as 30 cents and wheat as much as 20 cents as well. Intraday moves were scarce as outside markets saw mixed currencies and mostly softer crude oil and equities. Wheat prices popped at the end of the day by nearly a dime from their lows which helped bring corn and beans off their lows as well.
Weather continues to be the main price driver for now and forecasts do look improved but part of the reason for the late day rally was fear of sharply lower crop condition ratings after the close. Corn condition ratings came in down 4 percent vs. estimates for a 2percent drop while beans were down 2 percent vs. estimates for a 1 percent decline. The market seems to be very accepting of a below trend yield the question is will it be at the USDA’s current 158.7 or somewhere lower as many of the private estimates are.
The Russian Grain Union raised its 2011 grain crop forecast to 89-92 million tons yesterday, compared to earlier official forecasts for 85-90 million tons, and up from 61 million tons in 2010.
Overnight prices opened quietly with prices mixed failing to find any additional support despite larger than expected declines in crop conditions. By this morning prices reversed course somewhat with many commodity markets trading higher, rebounding a bit from yesterday’s beatings.
We look for corn to open 3 to 4 higher, soybeans to open 7 to 9 higher, meal to open 2 to 3 higher and for wheat to open 4 to 6 higher.
Daily CME spot market prices:
Block cheese: $2.155 (unchanged)
Barrel cheese: $2.125 (unchanged)
Butter: $2.04 (unchanged)
Grade A NFDM: $1.525 (unchanged)
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