Opening Grain Market Comments
Markets are called firmer this morning behind a firmer
overnight session lead by short covering and weather forecasts.
In the overnight session corn was up 10 cents, KC wheat was
up 5, MPLS wheat was up 6, CBOT wheat was up 6, and soybeans were up 20-22
cents. At 8:15 outside markets have the US
dollar about unchanged, DOW futures are about unchanged, gold is about
unchanged, and crude oil is down 50-60 cents a barrel.
Last night our markets started higher last night on weather
forecasts that are dry and warm for some areas.
The heat is needed in some areas; but hot and dry as beans are finishing
up isn’t exactly the best for yields. I
have also seen plenty of concern that the top end of corn yields is getting
took off. Here is CHS Hedging Weather
info from this a.m.
Other then weather it seems to be about the funds. The big headline for the funds is they have
plenty of room to buy; overall they still have a big short in corn and wheat. Here is CHS Hedging CFTC Recap
As for news this week we should find plenty. Weather forecasts will continue to changing
and we will have the normal export shipments and crop progress/condition report
today. Later in the week export sales
and ethanol numbers. But we will also
have the Pro Farmer Crop Tour and with how info flows now days this could
really help make our market more volatile.
The best way I know how to follow is twitter; use hash tag #pftour13.
Here is one of the tweets I seen this a.m.
After 5 stops in
SD, corn avg 158 bpa compared to 3 yr avg of 119.6 bpa. Avg Pod counts much
lower 776 v 984.6 #pftour13
With the late developing crops many are thinking that the
POD counts for beans will be low. The
bean crop being behind is also the reason why many are view the recent weather
forecast as much more bullish for soybeans then for corn.
As for marketing I think we need to keep in mind that unless
we really see things get bad and get worse very fast we still likely have a burdensome
fundamental situation. We are still
looking at a corn carryout more than two times the present carryout.
As for the soybean fundamental situation a drop in yield
quickly cuts the carryout there; but keep in mind many feel that demand might
be overstated. China imports in
particular.
For example purposes let’s say our corn yield loses 5
bushels an acre. That’s roughly 440
million bushels. If we lose any demand
at all; which based on the last USDA report how the USDA curved demand as
supply fell; you have to assume happens.
We still have roughly a carryout still 2 times the present
carryout. Could corn yield lose more than
5 bushels an acre? Sure; but keep in
mind that last week most thought the USDA yield was light; many in the industry
are still thinking yield could get closer to 160. Bottom line is until this big headline
changes we have to be cautious of the funds.
We need to get the funds to want to get long, we don’t want
to simply see them cover some shorts here and there. We need a headline were they decide to
support our prices. I don’t know that we
have that today. I think we are going
the right direction; but I am in the mindset that if one is under sold or under
hedged that making some catch up sales on bounces wouldn’t be the worst idea in
the world. Now if I already have done a
good job making sales then some patience is warranted depending on situations.
Please give us a call if there is anything we can do for you.