Opening Comments 4-8-2013
Markets can now have opening calls again as today is the
first day of the new trading hours. The
hours are a start at 7:00 p.m. each night; and then a break between 7:45 and
8:30 a.m. So basically the pit will open
at 8:30 a.m. central time and close at 1:15 p.m. central time. For guys like me that means a lunch before 2
in the afternoon. It could mean some
elevators won’t be buying when the market is closed but I guess that will be up
to the risk management departments.
Hopefully it adds back a little liquidity that it seemed to take away
from being 22 hours a day.
Markets are called better this a.m. behind last night’s
overnight strength that saw corn up 4 cents with the May-Dec spread firmer by a
nickel. Soybeans were up 11 when the
overnight session paused. KC wheat was
up 7 cents a bushel, with MPLS up 4, and CBOT wheat up 3 cents a bushel which
was nearly 7 cents off of its highs.
News today that we will want to watch include export
shipments that should be out at 10 a.m. and then this afternoon we will have a
crop progress/condition update. I haven’t
seen much improvement in the SD wheat.
Weather seems to be playing bullish a bullish card and
bearish card. The bullish card is delays
and cool weather that isn’t helping planting progress. On the bearish side of things many areas
including ours have some moisture in the forecast.
Friday’s Commitment of Traders showed that the funds sold
nearly 100,000 contracts of corn in the last week. Which was perhaps even slightly more then
what the trade thought.
The bird flu in China is still leading some headlines.
The big thing this week should be the USDA report. Estimates are for a big increase in the carryout;
mainly in corn with estimates in the 820 or so area. If you throw out the couple estimates that
are unchanged-lower despite the bearish stocks report you have estimates closer
to 850-900 and to me it feels like the trade as been trading a 850-900 type
number. So hopefully any carryout that
the USDA throws our way under 850 million bushels can be considered friendly
versus what the trade has been trading.
Here is a recap from last week for this week’s Supply and
Demand report estimates
Wheat Corn Soybeans
Average trade
estimate 0.727
0.812 0.136
Highest trade
estimate 0.755
0.925 0.160
Lowest trade
estimate 0.700
0.625 0.107
USDA
March
0.716 0.632 0.125
One scary thing has to be the fact that we have a 300
million bushel range. If all the
estimates were at 800-1 billion we might have a better chance to have a nice
report. But the estimate of 812 seems to
be a little light of what the trade has been talking about.
I have mentioned many times of some of the bullish possibilities
that could come out of the report; but the bottom line is the bullish scenarios
are not very likely and if the trade isn’t looking for super bearish number it
also becomes harder for us to see a bullish reaction and that is what we are
really hoping for. A bullish reaction;
not simply bullish numbers as those are not going to be easy.
Lastly don’t forget what time of the year it is. It is the time when we typically see some
weather premium added into the market and seasonally a time when we should be
looking to make some sales on the rallies; trying to take a little risk off the
table.
Please give us a call if there is anything we can do for
you.
Thanks