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.
Friday, June 8, 2012
Morning Note from Country Hedging's Joel Fitch
Below is morning note from Country Hedging's Joel Fitch
I’m going to be out of the office starting about noon today
and will return on Wednesday morning. I will have Ami or Chris send you
comments on Monday and Tuesday next week.
USDA reports 60 tmt of 11/12 soybeans sold to China.
USDA reports 350 tmt of 12/13 soybeans sold to China.
USDA reports 120 tmt of 11/12 soybeans sold to Egypt.
After the rally of the last couple of days the commodity
markets tried to be weaker overnight with the outside markets. Apparently
the markets weren’t impressed with Bernanke’s talk yesterday.
My contacts were suggesting that even with the move over the
last couple of days movement from the farm has remained very subdued. PNW
basis is back up at the highs from 3 weeks or so ago. Gulf basis has firmed
nicely this week, but still isn’t back to the highs from a few weeks ago.
Bean basis looks to be on a tightening trend as well. All this suggests
that grains are trying to divorce themselves from the outside markets.
Beans are still a problem. Egypt is our 6th
largest bean customer this year with 1 mmt of purchases, but I don’t ever
remember seeing them on a daily announcement. Any sales on the front of a
near $1 inverse tells you there is a need that can’t wait, but from a customer
who you never see announcements from. The USDA has deeply underestimated
what old crop bean sales are going to be. Based upon current estimates we
would need to see cancellations and not new sales, but this week we sold 8 mb of
soybeans and are now over the USDA export sales estimates by 21 mb already
before this morning’s announcements. New crop is just as a bad a
situation. The US is going to be the only supplier from harvest to March
and there is going to be plenty of demand.
I had two different estimates about Russian wheat production
this morning. One guy told me 53 mmt, which would be a little decrease
from the USDA’s numbers. The other guy told me that less than 50 mmt is a
50/50 proposition. I think the market would get pretty excited again if
production falls below 50 mmt.
So the main question that we will come in and evaluate on
Monday is where and how much rain fell over the weekend. Here is last
week’s drought monitor, followed by this week’s. Drought is steady in
most locations and building in IA, MO, IL.
See you on Wednesday. Please call the office,
800-328.6530, with anything you need.