Overnight 10 butter contracts traded all in November at unchanged. We look for Butter prices to open steady.
Grains started firm underpinned with a lower U.S. dollar and another trimming of “good to excellent” ratings posted late Tuesday. CROPCAST released their corn yield expectations of 145.2 bushels per acre with production of 11.913 billion bushels and soybean yield at 40.3 bushels per acre with production of 2.924 billion bushels. The trade didn’t seem to care as gains were fleeting and markets gave up their early gains. The bullish news thus far is priced in and there is more concern surrounding positioning ahead of next Monday’s USDA reports.
The market now seems to be shaking off bullish news and trending lower even despite outside market support so the market that couldn’t fall seems to be quickly becoming the market that can’t rally. We don’t see this as a reversal of the trend yet but our eyes are peeled as the bullish supply concerns seem to be factored in and the demand deterioration is seemingly yet to come at these high price levels. We will see how export sales look tomorrow morning because of the shortened holiday week.
Ukraine’s Ag Minister is expecting record wheat (10 million tons) and corn (12 million tons) exports in 2011/12. Ukraine exported 4.2 and 5.1 million tons last year, respectively. Total grain exports are seen at 24 million tons, double the ‘10/11 numbers.
We look for corn to open 2 to 3 lower, soybeans to open mixed from -2 to +2 lower, meal to open steady to 1 higher and for wheat to open 2 to 4 lower.
Daily CME spot market prices:
Block cheese: $1.79 (unchanged)
Barrel cheese: $1.725 (down 3 1/4)
Butter: $1.995 (unchanged)
Grade A NFDM: $1.490 (unchanged)
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