Wednesday, September 7, 2011
Grain Market Comments Sept 7th
Markets are called better this morning behind a firmer overnight session and outside markets that are supportive.
In the overnight session corn was up 6 cents, beans where 8-9 higher, MPLS wheat was up about a dime, KC wheat was up 7 cents, and CBOT wheat was up about 7 cents. As of 9:10 outside markets have European wheat up about 1 %, crude oil is up a little over 2.00 a barrel, the US dollar is weaker with the Cash index off 333 at 75.618, and the equities are showing a little bounce this a.m. with the DOW up about 171.
A rather quiet day for news this a.m. the market looks like it wants to consolidate into next week’s USDA updated S & D report. Ideas have started to move to thinking that supply is smaller as yields appear to be down and coming down with most private estimates getting lower every time someone announces their estimate. But estimates for carryout are showing that thoughts have also move to demand slipping for most of the grains. Bottom line is there appears to be some fundamental fireworks in the month or so.
I have seen that some of the early harvest reports for corn are coming in a little better then expected; but I have also seen ranges that are more then huge. One of the articles I read today referenced a yield ranging from 60 bushels to 230 bushels all from just one producer.
Basis for the row crops and probably grains in general is weaker; perhaps winter wheat basis is steady but the rest of the commodities we handle one probably considers the basis trend weaker and idea’s are quickly becoming that basis will continue the weakening trend until it hits some sort of harvest low.
The weaker basis is a little more concerning then normal to me; because if our fundamentals are so tight for a crop like old crop corn. How does basis do what it has done? Also I would say that it is tough to buy grain right now; most producers are generically bullish and not many are in have to sell situations or to summarize supply isn’t exactly running the elevators over with producers looking to sell but rather the opposite. But despite the ability for producers not to have to move much we are seeing basis weaker not stronger; because demand is simply that soft.
Not exactly super bullish indicators.
On the other side of things there still remains plenty upside potential in our markets if things go correct and if we get a perfect storm who’s to say that the upside potential isn’t huge as whether our economy’s are growing or struggling the world population doesn’t appear to be anything other then getting bigger.
Don’t forget that we do have our Marketing Hour Round Table today at 3:30 in Onida; come and join us.
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