Market Recap 16.12.09
Supply and demand, like Big Aggie, can be a cruel mistress, so what supply and demand are we seeing? We could point to the 1billion bu of corn still standing in the field in the US, yes we could point at the huge tonnage being carried out in the US, the crop still bursting to get out the door in Russia or the Ukraine. We could talk about the EU crop and wonder where it can go (especially French, with their most efficient ports getting logistically shut out of Egypt). And talking of Egypt, they are back looking for another 120K, Oman are looking for 50K and Japan is in for their regular tender at 126K. In Chicago, none of this gets the credence it deserves as they concern themselves with money flows, and fund managers desperate to not mess up between now and the end of the year. This is what makes using the derivatives as a hedge, so dangerous. The corn wheat spread has come in to a teeny tiny 130usc/bu (ish). The question is, will corn lead the bus, or will the funds pick on the smaller wheat market and bully that instead, or will the rebalancing actually happen, or, or, or...
Date of Publication: 16 Dec 09 9:12am ACST
Source: ABB Grain
