Information about grain markets and info to help producers to market crops. See how various grain marketing strategies can effect ones average price. We will be posting various potential trade and option strategies along with marketing decisions made on our mock farms.
Thursday, June 7, 2012
mid day 6-7-2012 - Comments from Country Hedging's Chris Steinhoff
Below is the mid day update from Country Hedging's Chris Steinhoff
Choppy, choppy, choppy…Crude up $1.80 then only 70 cents,
then $1.50 higher, then 60 cents firmer…Gold and the US$ are weaker…DJIA is 86
points better…FED bernanke’s words were a little disappointing to the $.
Corn----sharply higher early in modest volume but has backed
off as the outside markets have backed off. Weather, tight cash market and
World economic(china rate cut) are the main drivers, so too is the fact the
GSCI roll begins today, and some may be playing ahead of that. Export
sales were slow on corn as the month of May corn sales were pathetic. Japan and
Mexico were biggest buyers, unknown cancelled 50tmt. The USDAs 1.7bb export total
is at risk. Weather across parts of US corn growing areas has been dry, and by
reading crop comments on AgWeb there doesn’t seem to be a good cornfield
anywhere in the US. Meanwhile the crop gets closer to tasseling across Southern
and eastern growing areas and they could use some rain. Weather forecasts are
turning drier next week with coverage and amts seemingly no better than 40% of
1/10 to ¼ inch. Spreads vs CN are a nickel weaker and delivery values along the
ILL are cheaper than the strong cash market. US farmer sells very little old
crop or new crop, instead waiting for the rally, even though CN was $6.30 in
May, $6.70 in March and $7.80 last August! But weather and $ rule, and until
rain falls or forecasts make a complete change things may be very well
supported, at least until the Wall Street casino sells. Black Sea region has
received rain and they may be exporters, Brazil crop looks large they may
export more. China may OK Brazil origin
Beans---25-30 higher. Funds are long a lot of beans and
meal. Farmer movement is quiet as 500 bushels generates some decent cash.
Weather is not as critical at this stage for beans, but rain wouldn’t hurt.
News is pretty light. Export sales were decent but the slowest of May. USDA may
need to raise the export guess. Brazil farmer has sold and trucked a lot
of beans supposedly as some traders feel Brazil WILL run out of exportable
supplies at some point. Market still depends on China for the demand in the
world and US crusher keeps crushing but is having a harder time buying. Spreads
are a little weaker vs SN. Sx/SF is a slight carry with the uncertain crop and
acres. If moisture allows, double crop acres should be big.
Wheat---HRW harvest finds a better crop than farmers
thought. As combines are now stretching across a big section of KS, or will be
by next week. ND gets scattered rain and in many places the crop looks better
today than it did yesterday. Parts of the Black Sea have received good rains
which help what is there of the winter wheat and most definitely helps the
spring crops. Keep hearing of a small area in ND/MN where the spring wheat is
short, heading out and the heads are small-but this area is small and too bad
if you are in that area, as other areas look fabulous. Farmer selling some
spring wheat. Export sales were poor, and we saw cancellation or rolling
forward into the new crop year. May 31 stocks estimates could be interesting
after seeing 20% of HRW harvest in the past marketing year. Overall demand
remains poor and mills have their pick of HRW or DNS for protein.