The world wants to know how much more or fewer corn acres are going to be planted in 2008. The interest is much earlier than normal. Given how efficient, and flexible farmers are today compared even one year ago, price ratios, crop rotation and mother nature are not likely to reveal a solid hand until just weeks before soil temps reach 52 degrees. Argentina (harvest begins late Feb/early March), Brazil (harvest begins early Feb) and South Africa (harvest begins Mid April) corn crops are doing well, no major widespread crop damage. Argentina expected to open export registrations on Feb 15th.
Be aware, the dynamics of finding available supplies of wheat are changing; as Germany, Syria, Argentina and Ukraine are countries, which within the past 24 hours that have sold or have announced the intent to sell wheat. Japan has announced it will only buy 45 K tonnes of wheat in its weekly tender versus a normal amount of 120 to 130 K tonnes. The US dollar remains weak and is supportive to grain and oilseed exports from the US. Bearish to wheat is the potential for domestic demand rationing given the higher than usual cash price.
Commercials are rolling March soybean hedges to the May as cheap money allows them to capture additional merchandizing revenue. Surprising is how there is little mention of the extreme wet weather in #1 soybean producing state of Mato Grosso in Brazil. Of a 15-million tonne crop, there remains 14.85 million tonnes to be harvested. If rains do not turn off soon, look for the trade to lean bullish over production and quality reduction potential.
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