Friday, June 29, 2012

Mid day update for 6-29-2012 USDA stocks and acre report day

Below is mid day update from Country Hedging's Chris Steinhoff

Crude oil is up $4.50, US$ index is 1.16 points weaker…DJIA is 220 points firmer…all seems to be a result of Eurozone bailout fund and EU banks accessing that $...Month end  and quarter end positioning is prevalent.

I’ll be brief…
Corn---report day and the market was kinda volatile for about 5 minutes on either side of the 730am release time. Acres were slightly larger than expectations and about 500k larger than in March. June 1 stocks were 500mb smaller than a year ago according to the survey anyway. Farmer hauls old crop corn, and in many instances is surprised at how many bushels he still has left!!! Amazing!!! ….Garbage into the report, garbage out….Weather still remains warm and dry with a few scattered storms on the radar moving across ILL, but not really in the areas that need rain. Outside market strength and US$ weakness also provides major support. Cash markets seem to be steady at best and exporters seem to have a hard time finding homes for trains.  Domestic users appear to be slowing down with some ethanol plants beginning their scheduled downtime sooner than planned. CN enters first notice day and delivery and finds strength to lead spreads firmer. Not much else as we enter a weekend tasselling corn amidst hot and dry conditions. Are we factoring in the worst possible corn news???

Beans---lead the way in strength on tight world supplies, strong demand and the crop most influenced by world economics. USDA found a few more acres than expected but the double crop bean  acres are at risk because of dry weather. Personally I think those acres will get seeded, but whether they have the moisture to grow is the question ? All else is quiet as farmer selling has slowed, so has farm gate trucks. Be careful on new crop purchases as X forward is inverted.

Wheat—HRW harvest expands into South Dakota with strong yields reported, quality good and protein mixed. SRW harvest moves too. Summarizing KS, it seems the harvest was better than expected volumes. MGEx moves higher and the spring wheat crop looks pretty good in most places. Acres came in about where I expected as we saw a slight increase from March intentions. Stocks surprised me somewhat as it appears the USDA or farmer did not recognize an early HRW harvest. So the next stocks # may find a few bushels. Cash markets are mostly steady. Farmer movement is pretty strong for old crop DNS and steady HRW.

We have a watch box in IN…yoo hoo

Christopher Steinhoff
Market Analyst
651-355-3723 fax

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