Thursday, July 28, 2011

Market Comments 7-28-11

Markets are called mixed this morning behind a mixed overnight session and mixed/choppy outside markets.
In the overnight session  corn was off 3 cents, KC wheat was up 7-8 cents, MPLS wheat was up 6, and CBOT wheat was firmer by about 6 cents.  At 9:20 outside markets have crude up about 45 cents, equities are slightly firmer with the DOW up about 20 points, and the US Dollar is up about 175 with the cash index at 74.45.
News in the market place today include info on the Spring Wheat crop tour; which continues to find a little disappointment on projected yields along with comments of short acres.  Last estimate I seen was 42.1 bpa versus 46.3 last year.  I have also seen some commentary talking about dryness in Europe along with quality issues on their wheat quality; first it was quantity and now it is quality that the market appears to be concerned with. 
Ideas for the spring wheat crop tour are that of a smaller crop then last year; as mentioned above; but what is really important or a gauge will be the crop in comparison to trade estimates and demand.  One comments I have heard is that storage increased in ND a lot the past few years and with the drop in quantity the bins might be locked up so to speak.
Basis is a little weaker across the board for most of the grains as demand just isn't anything super special and we seem to have just enough supply.  For wheat what we really need is some export business because with harvest hitting us we are fast taking out the domestic marketplace and the improvement of freight has also helped increase supply.  I would look for basis to continue to weaken at least locally until we finally hit a harvest low which in theory doesn't happen for a good month or so.
Technically markets have really been trading consolidated and in sideways markets.
It is now about about 11 and the markets really have traded on the quiet side; with ranges rather small as we have corn in the red while wheat is steady to a couple better.  We did have wheat test the overnight highs but so far we haven't been able to hold those levels.
During the last couple of hours we seen the grains continue to chop around; with them bouncing around noonish to get close to unchanged/positive only to sell off in the final minutes of trade
When all was said and done we seen corn close down 9 cents on the Sept, while Dec corn was 5 lower, beans where off 9 cents, KC wheat was 5 lower, MPLS was down 4-5, and CBOT wheat was down 12 cents.  Outside markets have crude down about a quarter, Equities couldn't hold their early gains as the DOW closed off 62 points, and the US dollar is up 112 on the cash index at 74.197.
Technically today's price action was that off continued consolidation in a sideways pattern type of movement; we did see CBOT Wheat, MPLS Wheat trade at their highest level in about 9 sessions or so but we did close lower as they fell back into the trading range we have seen recently.  KC Wheat and Dec corn both came within a penny or so of yesterday's highs but both also failed to take it yesterday's highs out or close higher.
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