Monday, June 11, 2012

6-11-2012 Mid Day Comments from Country Hedging's Christopher Steinhoff

Below are 6-11-2012 Mid Day Comments from Country Hedging's Christopher Steinhoff

Spain banks get a bailout, but do not know what that really means for their unemployment??? DJIA is 37 points lower..US$ is slightly weaker…Crude oil is  90 cents lower…see CME announcement below

Corn----old crop was higher and new crop was down a couple, the BOOM pit opens at 930 and selling shows up. Must be trading radar as apparently the last system for a week moves into ILL. This system looks to be the last for a week to 10 days and keep hearing that parts of the ECB are not looking good and “burning up”. Well we need a yield larger than ever before to solve our corn balance sheet issue, can we get it? I am not ready to say no but it appears it may become more difficult as it seems today’s hybrids like it alittle too dry than a little too wet. USDA is out tomorrow and they may not change the corn balance sheet much as an early harvest will be in this old crop marketing year. Many expecting corn conditions to decline this afternoon. Export inspections of 17mbis incredibly disappointing as 33mb is needed weekly to achieve the USDA estimate, so maybe it is a good thing China bought some old crop otherwise what would our exports be? WCB looks to be in pretty good shape except parts of NE and KS are dry. US farmer hauls DP in some areas as “free” is what they like. A few are doing some pricing. $5.00 cash may be a price where they begin to sell some new crop, but time will tell on that. Spreads are firm as CN gains a nickel on everything else. We will begin the transition from old crop to new crop at some point so manage your cash and futures positions!!!!!!  Z/H is an 11 ¾ carry. Movement is slow enough basis remains firm. Could be some pre report positioning.

Soyabeans----same weather for beans but beans have time to be helped. Many expect the USDA to tighten old crop  carryout tomorrow to sub 200mb. Supplies seem tight as we keep shipping beans and crushing beans. Export inspection were 14.2mb, well above the  11 mb needed weekly. Looks like there may be some spreading of buying beans and selling corn as the SX:CZ is 2.48:1 and some believe it could go to 3:1. Farmer selling is light. Many still believe SA will run out of shippable soybeans sooner than later---but maybe their farmers are a lot like the US farmers who ALWAYS have more at home than they tell us. Here too the WCB seems to look better than the southern or ECB, but it is only June 11 and we have plenty of time. Biggest question is how many acres got planted? 74? 72? Or 76? Big USDA report is on June 29 on acres and stocks. Could be some pre report positioning.

Wheat----firmest for the first few hours this morning, why? Not following corn, not trading HRW harvest as yield reports definitely have a shot at a 400mb Kansas crop. Do we have a lot of pent up demand? Doesn’t really look like it. First weekly export inspections of the new marketing year were 21.5mb. Most DNS areas look very good as even a few of the dry areas actually got rain this weekend. Specs are buyers as we bounce out of last week’s lows. US spring wheat farmer is quiet and we are getting to where the winter wheat farmer will seed double crop beans if he has the moisture to do it.
Overall pretty quiet in the world as Egypt may begin to tender again. World and US have plenty of wheat!

Floor Opens at 7:20 a.m. CT for CBOT Grains and Oilseeds Tomorrow--June 12, 2012

As previously announced, pending CFTC review, floor trading for CBOT Grain and Oilseed futures and options will open at 7:20 a.m. CT on Tuesday, June 12 in advance of the release of two major USDA reports: Crop Production and World Agricultural Supply and Demand Estimates. Note that the current floor close (1:15 p.m. CT) will still be in effect on this date.

Christopher Steinhoff
Market Analyst
651-355-3723 fax

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