Tuesday, May 29, 2012

Market Comments 5-29-12 - Opening Calls?

Presently around 9:00 we have our markets trading mixed.

Old crop corn is trading about unchanged, while new crop corn is 4 weaker, Old crop beans are up 12 cents, new crop beans are up about a dime, KC wheat is off about 7 cents, MPLS wheat is 2 lower, and CBOT wheat is off a dime.  Volume is very light and has been during the non traditional hours; so it will be interesting to see how exactly our markets react once the pit session opens up at 9:30.  Outside markets should be a little supportive but adding to the mixed weaker tone is weather that seen some moisture in areas that needed some and some thoughts of some hedge pressure with wheat harvest starting to roll in some areas down south.  Presently we have European wheat off about 1%, crude is up about 60 cents a barrel, equities are firmer with the DOW up 96 points, Gold up about 10 an ounce, and the US dollar is softer with the Cash Index at 82.241.

It appears that a Japanese company Marubeni is buying Gavilon; not sure if it has any local effects.  But I do know that we have done some corn business with them in the past and I am sure it will be updated credit terms.  It sounds like they will be trying to get more China corn business in one of the stories I seen.

From what I am reading it doesn’t appear all areas that needed it got moisture coverage; but enough got it to pressure the markets a little bit.  At least until the next forecast comes out.  This should really tell us we are now deep into a weather market and mother nature along with money flow and the funds which should be linked to the outside markets control where we go or don’t go from here.

Many of the places down south and to the east still haven’t received needed rain; such as parts of the Delta and parts of the Ohio Valley; but forecasts do some for some.  I have also seen comments that parts of MN and Iowa have went from drought to flash flooding talks.   Bottom line is weather will likely remain volatile and influence our markets potential with big swings.

I did see some new crop Kansas wheat trains out this a.m.  It was a 60.7 # with 12.2 pro.  I asked my buyer on yields and pro versus last year.  He said pro was 2-3 tenths lighter then last year and yields seem to run between 35-55.  Overall that would be slightly disappointing but not a complete train wreck either.

Technically wheat did a good job bouncing off of support like it was suppose to on Friday; but now we need to see it follow threw to the upside.  We don’t want to see the markets give up Friday’s gains and presently it looks like the market is trying to despite the supportive outside markets.

Basis has been on the defensive and that hasn’t helped the old crop corn story; but cheaper prices don’t hurt demand either.

Please give us a call if there is anything we can do for you.


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