(I already took profits at the end of last week and so left some green shoots on the table).
Nothing fundamental changed - the N. American weather reports remain poor, the Chinese are still buying, and S. America remains a political mess. However, the nominally stronger dollar and weakness over in the larger oil markets (energy trading eclipses grains) weighed on prices today. Key technical levels in corn and soy were tested and failed.
In other news, it appears that the US government has confirmed what commodities advocate Jim Rogers has been pounding the table for so long: that US farmers are facing a credit crunch.
Plains Farmland Value Stabilizes, Credit Tightens In 1Q -Fed
Farmland values appeared to stabilize during the first quarter of 2009, but farm income declined and credit for farmers tightened, the Federal Reserve Bank of Kansas City said.
The report, based on a survey of 255 banks in the Tenth Federal Reserve District, showed that non-irrigated farmland values climbed 1.4% during the first quarter, while irrigated acreage held steady and ranchland values declined by 0.9%.
Farmland values were up 2.9% for non-irrigated land and 3.8% for irrigated land versus a year ago. The district includes Kansas, Nebraska, Oklahoma, Colorado, Wyoming and the western third of Missouri.
“District contacts reported demand for good quality farmland was still strong, but the market for marginal farmland has slowed dramatically,” the report states. Weaker crop and livestock prices
caused farm income to dip in the first quarter from record highs in 2008, with the weakest performance in Oklahoma and Kansas, which faced dry weather that hurt the wheat crop.
The lower income curbed capital spending, as “survey respondents noted that new equipment sales slowed dramatically as agricultural producers postponed purchases or bought used equipment instead.”
The report also noted tighter credit standards. The percentage of lenders raising collateral requirements reached a record high, and the rate of loan repayment fell for the second straight quarter.
Interest rates edged lower, the report said, averaging 6.6% for real estate loans and 6.9% for operating loans. Stress on the wheat crop due to drought caused an increase in the number of loan referrals to non-bank credit agencies, particularly in Oklahoma, the report said.
Source: CME Commodity News For Tomorrow