Matt Zeller

Morning Grain Comments mattz@fcstone.com

515-273-4053
January 27, 2010

OPENING CALLS: Lower REASON: Grains continue steady downslide on record US/SA production, outside market trends
TOMORROW: NOPA CRUSH @ 7 AM, EXPORT SALES @ 7:30 AM
MORNING TRIVIA: California is the fourth leading wine producer in the world, behind these three countries...
MARKET HEADLINES: NIGHT SESSION ACTIVITY: Grain Volume: 29,889
• Quick Editorial: it’s the same story again this morning—the grains are Symbol High Low Vol
Last Chg
once again staying afloat above their recent lows, but doing nothing to in-
spire any confidence or reverse the trend. The dollar is actually a bit lower CH0 363.50 360.50 361.00 -1.25 4,800
this morning and crude a bit lower, but both those results camouflage their CK0 374.25 371.50 371.75 -1.50 803
strongly intact trends. Financial/economic markets will be looking forward
to Federal Reserve verbiage today and the State of the Union address to- CZ0 397.00 394.25 395.00 -0.50 1,509
night. Fundamentally, minor weather issues are lingering in South Amer- WH0 495.00 491.50 495.00 +1.00 2,182
ica, but it’s not yet nearly enough to discourage record crop estimates.
• Japan imported 2.16 MMT of grain in Dec, up 3.6% from last Dec; they KWH0 500.00 497.25 499.75 +0.25 859
imported 1.625 MMT of that from the U.S., down 3.8% from LY. Total SH0 946.50 940.50 941.00 -6.50 3,700
Dec soybean imports hit 286k tonnes, up 36.7% from last year, with the
U.S. share of that at 262k tonnes, up nearly 55% from December 2008. SK0 955.50 949.75 950.25 -6.75 1,829
• Italy’s statistics agency cut its 2009 wheat and corn estimates this week; the SX0 929.00 923.75 924.25 -5.00 350
soft wheat number fell by about 12 percent this year to 2.87 MMT, while
durum wheat dropped by 10.5% to 3.68 MMT. Corn production was SMH0 286.90 284.60 285.10 -2.30 1,635
pegged at 7.66 MMT, down from an earlier estimate of 8.28 MMT in Oct. BOH0 36.74 36.47 36.49 -0.28 4,624
• Private analysts Celeres reported the 2009/10 Brazilian crop at 24 percent
sold as of last Friday, up one point on the week, but behind 29% at this CLH0 75.09 74.44 74.93 +0.22 25,197
point last season, and 38% on average. 68% of the crop was reported as DXY 78.88 78.53 78.64 +0.03 2,517
flowering, up from 60% a week ago and 67% a year ago, while 33% is the
grain-filling stage, up from 21% last week and ahead of 30% last season. FUNDAMENTAL UPDATE:
Today’s chart shows a couple different simple measures of
• The Rosario Grains Exchange reported Argentina’s 2009/10 corn crop at volatility in the grains—the bars (left axis) are the straight
18.07 million tonnes yesterday, on the high end of the range of private trade average daily range, while the lines (right axis) represent
estimates; the USDA pegged the crop at 15.0 MMT in its January report. that average as a percentage of the corresponding daily
Argentine produced 13.1 MMT of corn last season. The Exchange esti- mean. The years represent calendar years, not crop years,
mated the ‘09/10 soybean crop at a record 50.8 MMT, up from 31 MMT a with 2010 thrown in to show Jan numbers so far. All three
year ago, but below the USDA’s current 53 MMT figure. commodities’ volatility dropped sharply in both ‘09 and so
WEATHER UPDATE: far in ‘10, with ’10 thus far fairly comparable to 2007 levels
• No surprise—there will be some additional snows lingering in the central
Midwest today, particularly in Iowa, adding to surprise totals from early in
the week. However, the major precip event this week will move through CBOT Spot Grains Avg Daily Range
the southern Plains and far southern corn belt tomorrow and Friday, bring- 50 5.0
Corn Beans
ing heavy snows to the CO/KS/panhandles area, and heavy rains to the
southeastern U.S. The next real precip shot for the Midwest continues to be 45 Wheat Corn % 4.5
early next week. Extended forecasts vary on both temps and precip—temps
will warm back up early next week but remain around normal or slightly Bean % Wheat %
lower, while there looks to be nothing crazy as far as precip goes either. 40 4.0
NWS 6-10 DAY OUTLOOK: TEMPS & PRECIP
35 3.5

% of Daily Mean
30 3.0
Cents/Bushel

25 2.5

20 2.0

TRADITIONAL FUNDS & RECORD POSITIONS: 15 1.5

Corn Beans Meal Oil Wheat KC Wht
10 1.0
Daily -7,000 5,000 1,000 1,000 -2,000 -100
Net 170,776 45,140 27,595 6,629 -40,842 19,464 5 0.5

Rec + 395,081 155,278 77,636 89,459 42,092 70,497 0 0.0

00
01
02
03
04
05
06
07
08
09
10

Rec - -114,265 -78,161 -43,052 -38,849 -58,011 -39,895

Page 1 of 2
Trivia answer on Page 2
 Matt Zeller
Morning Grain Comments— mattz@fcstone.com
Technical Highlights 515-273-4053

TRIVIA ANSWER: France, Italy, Spain

CORN COMMENTS SOYBEAN COMMENTS
March corn continued its descent yesterday, losing 5 1/2 cents March beans went the other way late and picked up 7 cents
and forming a new low just above 360. Past that level, thin with a strong close, but posted a seventh straight higher low
support remains at 357 3/4 (62% retracement) and the 350 nonetheless. All signs continue to point towards support at $9
mark. Initial resistance remains in the 371-372 range. and 888-889 lows. Initial resistance stands at 963 1/4 (62%).
SUPPORT / RESISTANCE OUTLOOK SUPPORT / RESISTANCE OUTLOOK
Term Support Resistance Our Bias Term Support Resistance Our Bias
Short 360.25 372.75 Negative Short 932.50 959.50 Negative
Long 360.25 426.25 Negative Long 932.50 1077.25 Negative
TREND OUTLOOK TREND OUTLOOK
Term 40-Per MA 20-Per MA Trend Term 40-Per MA 20-Per MA Trend
60 Minute 364.26 362.41 Lower 60 Minute 942.54 942.63 Higher
Day Chart 397.19 393.06 Lower Day Chart 1019.10 997.65 Lower
TECHNICAL INDICATORS TECHNICAL INDICATORS
Open Int Volume Volatility RSI Levels Open Int Volume Volatility RSI Levels
Decreasing Normal Low Very Oversold Increasing Normal Low Very Oversold
60 MINUTE MAR CORN - eCBOT, w/ MA’s & RSI 60 MINUTE MAR BEANS - eCBOT, w/ MA’s & RSI
375 980

970
370
960

950
365
940

360 930
1/19
1/20
1/20
1/21

1/21
1/22
1/22
1/25
1/25
1/25
1/26
1/26
1/27

1/19
1/20
1/20
1/21

1/21
1/22
1/22
1/25
1/25
1/25
1/26
1/26
1/27
100 100
75 75
50 50
25 25
0 0
60 MINUTE MAR WHEAT - eCBOT, w/ MA’s & RSI
WHEAT COMMENTS 505
March wheat continued to oscillate near the $5 area, ultimately
losing out to resistance at that level yesterday and dropping 4 500
1/4 cents. Post-report lows stand near 485, with lows waiting
at the 460 area after that. Initial resistance remains at $5.
SUPPORT / RESISTANCE OUTLOOK 495
Term Support Resistance Our Bias
Short 491.50 504.00 Negative 490
Long 485.25 575.00 Negative
TREND OUTLOOK 485
1/19
1/20
1/20
1/21

1/21
1/22
1/22
1/25
1/25
1/25
1/26
1/26
1/27

Term 40-Per MA 20-Per MA Trend

60 Minute 495.86 493.24 Lower 100
Day Chart 537.11 529.89 Lower 75
TECHNICAL INDICATORS 50
Open Int Volume Volatility RSI Levels 25
Increasing Normal Low Very Oversold 0
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Matt Zeller www.fcstone.com

mattz@fcstone.com 800-422-3087