Thursday, June 7, 2012
Grain Market Comments 6-7-2012
Markets closed firmer across the board today.
Old crop corn ended up 8 cents firmer, new crop corn was 17 cents higher, beans where 42 cents better on both old and new crop, KC wheat was 13-14 higher at closing time; but the last trade was trade was only 6-7 higher, MPLS wheat was up 19-23 cents, CBOT wheat was up 18, the US dollar was about unchanged leaving a near Doji on the charts with the cash index at 82.260, gold got hammered down $46 an ounce, and crude was also near unchanged at 84.82.
Overall a good day for the grains; but I didn’t care for the outside markets and how they closed. The US dollar left a near Doji and equities where well off of their highs with the Nasdaq down nearly a ½ of a percent. It made me ask the question if the price action on the outside markets the past couple of days was just a correction before they resume their “risk off” type of attitude. I posted a couple US dollar charts at http://grainmarketingplans.blogspot.com/2012/06/us-dollar-cash-index-chart-6-7-2012.html
Basis remains on the firm side for most of the grains. I would note that we are seeing product needing to move locally and that could cause some basis weakness before wheat harvest as producers and elevators look to make room for wheat harvest.
The outside market strength helped our markets today but so did the weather. There is some moisture forecasted for early next week and if it happens we could see a little pull back; but right now everyone is talking about the hit and miss dry weather in many areas with some talking decreased production.
Next week we will have a USDA report that will have updated Supply and Demand numbers for both the old crop grain balance sheets as well as the new crop balance sheets. Most of the estimates I am seeing are for a bullish report with decreased stocks. This could open some risk if the USDA doesn’t agree with the estimates and prints bullish numbers. After all crop conditions for corn and early emergence are not exactly that of a decreasing yield; but that of an increasing yield; yet I don’t see many estimates looking for corn, wheat, or bean carryout increases from last month.
The average trade estimates that I have seen for corn is down 30 million bushels on old crop stocks with new crop carryout estimated nearly 90 million less than the last USDA report. Beans and wheat have small decreases estimated but nothing major.
Sunflower prices have firmed up the past couple of days with the firm bean market. Feels like buyers are getting close to scrambling for coverage as producers become less willing sellers.
It is now past 5:00 p.m. and the markets have opened back up; we presently have July KC wheat off about 7 cents, CBOT wheat off about 7 cents, MPLS off about a penny, beans down about a nickel, and corn off 2-3 cents while crude is off over a dollar a barrel.
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