Wednesday, June 13, 2012

Mid Day Comments from Country Hedging's Chris Steinhoff 6-13-12

Below are mid day comments; they are from Country Hedging's Chris Steinhoff

Crude oil is up 30 cents as draw was a little larger than expected. …gold is up $8.00, silver is up a penny or 2….DJIA is 14 points lower as JP morgan exec attempts to explain things to congress…

Corn—Stronger CN(spot business? Or guldmon roll over?….the the rest is lower led by CZ as the N/Z firms 2 dimes as some forecasters are calling for a weather pattern shift to better rain chances the LH June timeframe. Spotty rains have fallen in parts of the ECB the past week, WCB coverage has been decent with more on the radar screens this morning and possibly for the next 5 days. The ECB looks to have a good chance Tuesday through Thursday of next week. Computer $ still sees a 1.8bb carryout and 166bpa yield and signals sells. Even paper directed by humans is selling without much buying to lend support.USDA will give us acres and June 1 stocks on June 29..could get interesting…. US still has a chance at a very good yielding crop and the USDA says it is 19bpa larger than last year’s crop. Warm nights were the excuse last year…farmer is a slow seller but keeps showing his hand alittle in that he still has old crop left at home to sell? Hummmph? Someone will get caught carrying old crop into the inverse. Some endusers cover July and August needs vs CN so there may not be much of a reason to be bidding against CU for long if at all. Be carefull on your hedges. Z/H is a 11 ¾ carry and the Z/N is a 26 ¾ carry…Guldmin Saks talks their position.  Weekly ethanol production was higher week on week so ethanol plants do not appear to be slowing down or running out of corn, at least not on June 13.

Soyabeans---getting hit hard as fund selling is quite heavy amid slow cash movement. USDA says we are in for tight soybeans supplies for the next couple of years, but traders of the corn/bean spreads drive it this way then that way as they keep the range and try to make $ at it. Beans lose on corn today! Some are still talking 3:1.  If corn weather is to improve so will bean weather. Many expect USDA to raise acres on June 29, but that will all hinge on how the US farmer filled out his survey, and you never know on that!!! Farmer selling is light and commercials price beans to the crusher. Overall news is quiet and so is China, but they are the world bean market and no one really knows what is going on there currently or in the future, and trying to guess is futile. Spreads are weaker as N/X is 4 weaker at a 94 ¼ inverse after seeing $1.00 earlier today…X/F is a pennhy carry…

Wheat---HRW harvests finds a pretty good crop that burned up in Kansas, average or better, but yields are variable…World carryout is less than it was 2 months ago…Supply the reason, what happens if demand picks up? Could get interesting…spring wheat cash markets roll to basis MWU. Not feeding much wheat in US and will world slow down and wheat/corn spread? Aussie says their crop is going to be alittle smaller. We know black sea is because of dry fall and tough winter…India has wheat to sell but is not a traditional big seller. US has a projected stocks/use of 29%...Spring wheat crop looks like it is getting larger. KC and CME are carries, MGEx inverts further, is it because of all this demand we have or is it someone playing games causing panic?

Better get this out before something else changes on me. Call if you need anything

Christopher Steinhoff
Market Analyst
651-355-3723 fax

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