Grain Market Comments 6-18-2012
Markets closed firmer across the board today behind dry and
hot weather.
Corn was up 20 on old crop, new crop corn was up 28, beans
where firmer by 8 cents on old crop, new crop beans where up 25 cents, KC wheat
was up by about 21 cents, MPLS was 12-15 higher, CBOT wheat was up 21, equities
closed mixed with the DOW off by 25 points while the NASDAQ was firmer, crude
was off 70 cents a barrel, and the US dollar up 330 on the cash index at
81.957.
With the mixed to weaker outside markets all one can really
say for the grain markets today is impressive.
But keep in mind where these markets where just last week; so maybe I should
say impressive one day price action as most of our markets are still well below
last week’s highs.
This afternoon we had crop conditions and this is really
what helped our price action out today.
Not the new numbers that saw decreases in the conditions this afternoon
but the stress the our crops are under from hot and dry weather with more forecasts
calling for the same in many parts of the eastern corn belt; at a time when
some area’s are starting to pollinate.
The thing about weather driven markets is they can be
extremely volatile; give it all back and then some in a hurry or run for an
extended period of time. They are not
for the tame at heart. In regards to
marketing grain during a weather rally usually people are making comments that once
we get a weather scare I will make a sale and then it happens typically fear
and greed keep the sale from happening.
Fear that they are being effected by the weather rally such as
experiencing drought or greed from the idea that the prices will run for an
extended period of time and no one wants to sell to early and miss the 2008
spring wheat type of rally. I don’t know
if today’s bounce was the start of another big rally for the grains or just another
selling opportunity in a longer term bear market. I do know however that price bounces give
producers opportunities to help manage their risk. If you need help in managing your risk or
looking at a grain marketing plan please give us a call.
As mentioned above crop conditions where down this afternoon
with corn conditions down 3% to 63% G/E.
Soybean conditions where down 3% also to 56% G/E.
Corn basis is under pressure and very volatile as many bids
are in the process of rolling to the September futures. Look for our local basis to see plenty of pressure
because as of this moment our two main buyers have no bid for corn until new
crop. One of the ethanol plants has to
buy more if they run at full speed; but if the scale back they probably have
coverage to get until new crop. The
other still has to buy for August September; but only if they run. Talking to them it looks like they have no
coverage but with margins don’t have a lot of interest buying either.
Please give us a call if there is anything we can do for
you.
Grain
Merchandiser
Midwest
Cooperatives
800-658-5535
800-658-3670
605-295-3100
(cell)
605-258-2166
(fax)
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