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Dailyfutures.com
Corn, Soybeans, Wheat and Cotton Futures Markets
Corn
Chart Comments
Long-term (not shown): In September of 2006, corn prices started to reflect a significant boost in ethanol production and that fundamental is still growing. Corn's big up-trend was interrupted by the financial crisis in the second half of 2008 and prices appear to now be trading between $3 and $4.50 (updated 6-22-09).
Daily (below): The sell-off on June 12th left behind a lower high and, on June 16th, prices closed below the 125-day average. That is not a good sign and the bearish acreage report on June 30th did not help (updated 6-30).
Key Events - Corn
2009
6-30 - USDA: 87.04 million planted acres, +1% from a year ago, the second most acres since 1946, and much more than expected.
6-10 - USDA 2009-2010 ending stocks estimate at 1.090 billion bushels or 9% of total use.
6-2 - USDA: 93% of corn crop is planted.
5-18 - USDA: Only 62% of corn crop is planted.
5-12 - USDA 2010 U.S. ending stocks estimate at 1.145 billion bushels or 9% of total use.
4-27 - Outbreak of swine flu in Mexico becomes an international health emergency.
3-31 - USDA reduced its 2009 planting estimate for corn from 86 to 85 million acres.
3-18 - Two-cent drop in the U.S. dollar after the Fed said that it will keep the federal funds rate low "for an extended period."
3-11 - USDA 2009 ending stocks estimate reduced from 1.790 to 1.740 billion bushels.
2-27 - USDA predicts 2009-2010 U.S. ending stocks at 1.72 billion bushels, down from 1.79 billion bushels in 2008-2009.
2-12 - USDA predicts U.S. corn crop at 12.68 billion bushels in 2009, up 5% from 2008.
1-16 - Talk of dry weather in South America.
1-12 - USDA 2009 ending stocks estimate increased from 1.474 to 1.790 billion bushels.
2008
12-11 - Surprise increase: USDA 2009 ending stocks estimate increased from 1.124 to 1.474 billion bushels, nullifying concerns about a late harvest. Also, falling gasoline prices are hurting ethanol demand.
11-10 - USDA 2009 ending stocks estimate increased from 1.088 to 1.124 billion bushels.
10-28 - Surprise estimate: USDA 2009 ending stocks reduced from 1.154 to 1.088 billion bushels.
10-10 - USDA 2009 ending stocks estimate increased from 1.018 to 1.154 billion bushels.
9-17 - Government takes over 80% of AIG with $85 billion investment.
9-15 - Lehman Brothers goes bankrupt. Bank of America buys Merrill Lynch.
8-12 - USDA 2009 ending stocks estimate increased from 833 to 1,133 million bushels.
7-11 - USDA 2009 ending stocks estimate increased from 673 to 833 million bushels.
7-7 - Start of a string of good growing weather.
6-30 - USDA acre estimate down 7% from a year ago - more acres than expected.
Fundamental Notes
On June 10, 2009, the USDA lowered its estimate of 2009-2010 U.S. ending stocks from 1.145 to 1.090 billion bushels, down from 1.60 billion bushels the previous year. That put the 2010 ending stocks to use ratio at 9%, matching its lowest in seven years. On the world scene, the USDA is looking for 2009-2010 ending stocks to fall from 139 to 125 million tons, or 16% of annual use. Expect a larger production estimate in the USDA's July report from 87.0 million planted acres of corn.
In 2008-2009, the USDA expects exports to be down 28% and, so far, they are down 32% from a year ago. On June 29th, the USDA said that 72% of the corn was rated good to excellent, up from 61% a year ago.
Currently, the federal mandate for ethanol use is supporting the corn market and there is even talk about increasing the amount of ethanol blended into each gallon of gasoline. As time passes, however, the market is likely to find and develop other, more cost-effective sources of energy, meaning that the future of using corn to produce ethanol is not promising. If you are a corn producer, you need to ask yourself, what will the price of corn be if it is not used to make ethanol and am I prepared for that to happen?
| U.S. Corn Market Statistics (in billion bushels) | |||||||||
| Year ending Sept. 30, | 2002 | 2003 | 2004 | 2005 | 2006 | 2007 | 2008 | 2009 | 2010 |
| Production | 9.50 | 8.97 | 10.09 | 11.81 | 11.11 | 10.53 | 13.04e | 12.10e | 11.94e |
| Total Use | 9.81 | 9.49 | 10.23 | 10.66 | 11.27 | 11.21 | 12.74e | 12.14e | 12.46e |
| Ethanol Use | na | 1.00 | 1.17 | 1.32 | 1.60 | 2.12 | 3.03e | 3.75e | 4.10e |
| Ending Stocks | 1.60 | 1.09 | .96 | 2.11 | 1.97 | 1.30 | 1.62e | 1.60e | 1.09e |
| Stocks/Use ratio | .16 | .11 | .09 | .20 | .17 | .12 | .13e | .13e | .09e |
| USDA corn crop maps: USA, China, or Brazil. | |||||||||
| U.S. Ethanol Market Statistics (in billion gallons) | |||||||||
| Calendar year | 2001 | 2002 | 2003 | 2004 | 2005 | 2006 | 2007 | 2008 | 2009 |
| Production | 1.77 | 2.13 | 2.80 | 3.40 | 3.90 | 4.85 | 6.50 | 9.20 | |
Soybeans
Chart Comments
Long-term (not shown): For the past few decades, soybeans spent most of their time between $4 and $6 per bushel. In late-2006, soybeans broke higher, in sympathy with the big jump in corn demand. Prices are now searching for a new range in the aftermath of the 2008 financial crisis. Possibly $8 to $13? (updated 7-1-09).
Daily (below): November soybeans closed above the 125-day average on April 3rd and spent a few weeks chopping around before heading higher. Soybeans are currently the strongest grain and have the best chance to go higher. The fact that they survived the acreage report and prices are still above the 125-day average is a good sign (updated 6-30).
Key Events - Soybeans
2009
6-30 - USDA: 77.48 million planted acres, +2% from a year ago and a new record high, but less than expected.
6-10 - USDA: "Brazil's soybean oil exports are expected to decline sharply as the government announced a further increase in biodiesel admixtures."
6-10 - USDA: 2009-2010 ending stocks estimate reduced from 230 to 210 million bushels. 2008-2009 ending stocks estimate reduced from 130 to 110 million bushels.
Fundamental Notes
On June 10, 2009, the USDA estimated that U.S. 2009-2010 ending stocks will total 210 million bushels, up from 110 million bushels in 2008-2009. The resulting 2010 ending stocks to use ratio is 7%, on the lean side. Worldwide, the USDA estimated that 2009-2010 ending stocks will increase from 42 to 51 million tons or 22% of annual use. Hot and dry weather hurt the crops in South America this year. The USDA now estimates that Brazil's and Argentina's soybean crops were down 17% in the spring of 2009 from a year ago. The USDA's July report will likely show more soybean production from 77.5 million planted acres.
In 2008-2009, the USDA expects exports to be up 9% and, so far, they are up 10% from a year ago. On June 29th, the USDA said that 68% of the soybean crop was rated good to excellent, up from 58% a year ago.
| U.S. Soybean Market Statistics (in billion bushels) | |||||||||
| Year ending Aug. 31, | 2002 | 2003 | 2004 | 2005 | 2006 | 2007 | 2008 | 2009 | 2010 |
| Production | 2.89 | 2.76 | 2.45 | 3.12 | 3.06 | 3.20 | 2.68e | 2.96e | 3.20e |
| Total Use | 2.93 | 2.79 | 2.52 | 2.99 | 2.87 | 3.08 | 3.06e | 3.07e | 3.11e |
| Ending Stocks | .208 | .178 | .112 | .256 | .449 | .574 | .205e | .110e | .210e |
| Stocks/Use ratio | .07 | .06 | .04 | .09 | .16 | .19 | .07e | .04e | .07e |
| USDA soybean crop maps: USA, and Brazil. | |||||||||
Wheat
Chart Comments
Long-term (not shown): From 1998 to 2002, wheat traded under $3 per bushel with plenty of supply and falling demand. In mid-2006, prices gained strength and eventually hit $13 per bushel after weather problems hit several different wheat-areas, all in the same season. In March of 2008, prices got hit with strong selling and then fell more, thanks to the financial panic in the second half of 2008. Possible support at $4.00? (updated 6-22-09).
Daily (below): Wheat prices had a big run-up in May, but fell just as fast - not a good sign. Current supplies of wheat appear plentiful and, on June 17th, prices closed below the 125-day average - also not a good sign (updated 6-19).
Key Events - Wheat
2009
6-30 - USDA: 59.78 million planted acres, -5% from a year ago.
Fundamental Notes
On June 10, 2009, the USDA estimated that 2009-2010 U.S. ending stocks will total 647 million bushels, down from 669 million bushels in 2008-2009. The resulting U.S. ending stocks to use ratio is a comfortable 30%. Worldwide, the USDA is expecting 2009-2010 ending stocks to increase from 168 to 183 million tons, or 28% of annual use. The USDA's July report will likely show more production from 59.8 million planted acres.
In the new 2009-2010 season, the USDA expects wheat exports to be down 11% and so far, they are down 36% from a year ago. On June 29, 2009, the USDA said that 40% of the winter wheat crop was harvested. The USDA also said that 76% of the spring wheat was rated good to excellent, up from 74% a year ago.
| U.S. Wheat Market Statistics (in billion bushels) | |||||||||
| Year ending May 31, | 2002 | 2003 | 2004 | 2005 | 2006 | 2007 | 2008 | 2009 | 2010 |
| Production | 1.95 | 1.61 | 2.35 | 2.16 | 2.11 | 1.81 | 2.05e | 2.50e | 2.02e |
| Total Use | 2.15 | 1.97 | 2.35 | 2.23 | 2.15 | 2.04 | 2.31e | 2.26e | 2.15e |
| Ending Stocks | .777 | .491 | .546 | .540 | .571 | .456 | .306e | .669e | .647e |
| Stocks/Use ratio | .36 | .25 | .23 | .24 | .26 | .22 | .13e | .30e | .30e |
| USDA wheat crop maps: USA spring, and USA winter. | |||||||||
Cotton
Chart Comments
Long-term (not shown): For the past 12 years, cotton spent most of its time between 40 and 80 cents and that range is still in tact. In September of 2008, prices broke down under pressure from the financial crisis and expectations for slower world growth ahead. Since then, prices have shifted to a narrower range of 40 to 60 cents (updated 7-1-09).
Daily (below): Cotton closed above the 125-day average on April 8th and had a nice rally, but is there more in the tank? So far, prices are staying above the 125-day average with hot and dry conditions in the southern U.S. (updated 6-25).
Key Events - Wheat
2009
6-30 - USDA: 9.05 million planted acres, -4% from a year ago.
Fundamental Notes
On June 10, 2009, the USDA estimated that U.S. ending stocks will total 5.6 million bales in 2009-2010, down from 6.6 million bales in 2008-2009. That puts the 2010 ending stocks to use ratio at 39%, down slightly from the previous three years, but still plentiful. Worldwide, the USDA expects 2010 ending stocks to fall from 61 to 57 million bales, or 50% of annual use. The USDA's July report will likely show more production from 9.05 million planted acres.
U.S. mill use increased from an annual rate of 3.09 to 3.34 million bales in May. In 2008-2009, the USDA expects exports to be down 7%, but so far, they are up 4%. On June 29th, the USDA said that 42% of the cotton was rated good to excellent, down from 45% a year ago.
| U.S. Cotton Market Statistics (in million bales) | |||||||||
| Year ending May 31, | 2002 | 2003 | 2004 | 2005 | 2006 | 2007 | 2008 | 2009 | 2010 |
| Production | 20.3 | 17.2 | 18.3 | 23.3 | 23.9 | 21.6 | 19.2e | 12.8e | 13.25e |
| Total Use | 18.7 | 19.2 | 20.0 | 21.1 | 23.4 | 17.9 | 18.2e | 16.2e | 14.3e |
| Ending Stocks | 7.45 | 5.39 | 3.51 | 5.50 | 6.05 | 9.48 | 10.04e | 6.60e | 5.60e |
| Stocks/Use ratio | .40 | .28 | .18 | .26 | .25 | .53 | .55e | .41e | .39e |
| USDA cotton crop maps: China, and USA. | |||||||||
Tons and bushels
One million metric tons of corn equals 39.37 million bushels.
One million metric tons of soybeans or wheat equals 36.74 million bushels.
One million metric tons of cotton equals 4.593 million bales.
One bushel of corn produces (roughly) 2.8 gallons of ethanol.
One metric ton of ethanol equals 7.94 petroleum barrels.
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