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Ron and Sue Mortensen: Shuffle the deck

08/19/2010 @ 3:52pm

The great grain re-shuffle continues.  With the small Russian grain crop and the export embargo, buyers around the world are scrambling to secure adequate wheat and feedgrains supplies.  So US exports announced this morning were very, very large-as expected.  

Wheat buyers included Egypt, the importer most upset by the Russian embargo.  They purchased 594,000 metric tons of wheat.  Corn buyers were many--unknown, Japan, Mexico and Egypt.  Smaller purchases included a cargo to China.  

 Plus the Chinese were the massive buyers of soybeans, as usual.  Some have their imports continuing to increase (as well they might).  Up or down, the Chinese have been aggressive in their purchases in an attempt to make sure that their shipments will make it out the door before export capacity is too strained.

Perhaps it was, therefore, a “buy the rumor, sell the fact” sort of reaction today, with corn ending 4 cents lower and soybeans crashing 18 ½ cents.  Soybeans even made new lows for the week, although it will take tomorrow’s action to determine if any sort of reversal (on a weekly basis) has been made.

More likely, for soybeans, is that the constant chatter about SDS has run its course, as now everyone is quite certain the Iowa soybean crop is brown and dead.  That is a massive over-reaction, of course, but there is also the drumbeat of excellent pod counts coming out of this week’s crop tour.   

The risk of loss in trading commodities can be substantial.  You should therefore carefully consider whether such trading is suitable for you in light of your financial situation.  

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