Grain Market Comments 6-7-2012
Markets closed firmer across the board today.
Old crop corn ended up 8 cents firmer, new crop corn was 17
cents higher, beans where 42 cents better on both old and new crop, KC wheat
was 13-14 higher at closing time; but the last trade was trade was only 6-7
higher, MPLS wheat was up 19-23 cents, CBOT wheat was up 18, the US dollar was
about unchanged leaving a near Doji on the charts with the cash index at
82.260, gold got hammered down $46 an ounce, and crude was also near unchanged
at 84.82.
Overall a good day for the grains; but I didn’t care for the
outside markets and how they closed. The
US dollar left a near Doji and equities where well off of their highs with the
Nasdaq down nearly a ½ of a percent. It
made me ask the question if the price action on the outside markets the past
couple of days was just a correction before they resume their “risk off” type
of attitude. I posted a couple US dollar
charts at /grainmarketingplans/2012/06/us-dollar-cash-index-chart-6-7-2012.html
Basis remains on the firm side for most of the grains. I would note that we are seeing product
needing to move locally and that could cause some basis weakness before wheat
harvest as producers and elevators look to make room for wheat harvest.
The outside market strength helped our markets today but so
did the weather. There is some moisture
forecasted for early next week and if it happens we could see a little pull
back; but right now everyone is talking about the hit and miss dry weather in many
areas with some talking decreased production.
Next week we will have a USDA report that will have updated
Supply and Demand numbers for both the old crop grain balance sheets as well as
the new crop balance sheets. Most of the
estimates I am seeing are for a bullish report with decreased stocks. This could open some risk if the USDA doesn’t
agree with the estimates and prints bullish numbers. After all crop conditions for corn and early
emergence are not exactly that of a decreasing yield; but that of an increasing
yield; yet I don’t see many estimates looking for corn, wheat, or bean carryout
increases from last month.
The average trade estimates that I have seen for corn is
down 30 million bushels on old crop stocks with new crop carryout estimated
nearly 90 million less than the last USDA report. Beans and wheat have small decreases
estimated but nothing major.
Sunflower prices have firmed up the past couple of days with
the firm bean market. Feels like buyers
are getting close to scrambling for coverage as producers become less willing
sellers.
It is now past 5:00 p.m. and the markets have opened back
up; we presently have July KC wheat off about 7 cents, CBOT wheat off about 7
cents, MPLS off about a penny, beans down about a nickel, and corn off 2-3
cents while crude is off over a dollar a barrel.
Please give us a call if there is anything we can do for
you.
Jeremey Frost
Grain Merchandiser
Midwest Cooperatives
800-658-5535
800-658-3670
605-295-3100 (cell)
605-258-2166 (fax)
http://grainmarketingplans.blogspot.com/