Feedgrain Market Outlook
Vol. 18 No. 85 - October 30, 2009 - PDF format
Market Situation
Monday’s Crop Report showed a slight decrease in the Crop Condition Index score. This week’s reading is down 3 points to 375. The index score in 2004, was 392. Seth Meyer, University of Missouri, uses his yield and production model based on crop scores to come up with a yield projection of 158 bushels and total corn production of 12.5 billion bushels. USDA’s October projection was a record yield of 161.9 and production of 12.95 billion bushels.
The delays in maturity and harvest add to speculation that the estimated size of the U.S. corn crop in November will be smaller than the October estimate. Maturity is still two weeks behind--99 percent normal, 90 percent this week. The percent harvested fell further behind relative to normal this week, now over three weeks. The five-year average for the end of October is 58 percent harvested. As of last Sunday, 20 percent of the corn was harvested nationwide. Every state should be at least 33 percent done, but Michigan, Minnesota, North Dakota, South Dakota, and Wisconsin are all still in single digits. Illinois is the furthest behind compared to normal, down 63 percentage points—77 percent normal, 14 percent done.
Outside markets continue to dominate fundamentals as corn responds to broad economic barometers and the ebb and flow of investment dollars. As with wheat, prices generally set back for the week but are higher for the month.
| Friday October 23 | Friday October 30 | Weekly Net Change | Weekly Percentage Change | October Net Change | October Percentage Change | |
| Dow Jones Ind. Avg | 9977.24 | 9712.73 | -264.51 | -2.65% | 0.4500 | 0.00% |
| Dec ‘09 Crude Oil | 80.50 | 77.03 | -3.47 | -4.31% | 6.0900 | 8.58% |
| Dec ‘09 Copper | 3.03 | 2.96 | -0.08 | -2.52% | 0.1390 | 4.93% |
| Dec ‘09 Dollar Index | 75.60 | 76.48 | 0.88 | 1.16% | -0.3800 | -0.49% |
| Dec ‘09 Corn | 3.9775 | 3.6600 | -0.3175 | -7.98% | 0.2200 | 6.40% |
| Dec ‘10 Corn | 4.2975 | 4.1175 | -0.1800 | -4.19% | 0.1900 | 4.84% |
| Dec ‘11 Corn | 4.3225 | 4.2200 | -0.1025 | -2.37% | 0.1575 | 3.88% |
Market Strategies
I have completed my 2009 sales with the end of harvest. Rather than store grain, I prefer to buy call options in the anticipation of higher prices. A May call, which expires in April, would carry me through early 2010 acreage concerns and the South American corn and soybean harvests. If global economic conditions continue to show improvement, corn should be carried higher by an overall increase in commodity demand.
Mark Welch
Texas AgriLife Extension Economist
401 C Blocker Building
TAMU 2124
College Station, Texas 77843
Tel. (979)845-8011
Fax. (979)845-4906
JMWelch(at)ag.tamu.edu
The opinions and recommendations expressed are solely those of the author and are intended for educational purposes only as part of the Texas AgriLife Extension Service. Texas AgriLife Extension Service assumes no liability for the use of this newsletter. Educational programs of the Texas AgriLife Extension Service are open to all people without regard to race, color, sex, disability, religion, age, or national origin. The Texas A&M University System, U.S. Department of Agriculture, and the County Commissioners Courts of Texas Cooperating