Monday, July 23, 2012

Mid Day update 7-23-2012 from Country Hedging's Chris Steinhoff

Risk off, herd selling day, Wall Street casino sells but buys US$ which Is up 0.240 points…DJIA is  141 points lower…gold is $8.00 lower so your bling bling is worth less at the pawn shop today.

Corn---lower early but coming back. New all time highs are again possible until we can get some definition of crop size. Corn has rallied  $3.00 in 30 days, so due for  lower correction at some point on profit taking as there are some BIG profits to take. Crop IS NOT GETTING BIGGER today. The crop has sustained 90+degree highs for weeks with scattered rain events. Crop conditions are likely to see sizable declines again this afternoon. IS crop size 123.6bpa?(my guess) or is it 130 or 138bpa???? Need to slow demand like never before. Exports have slowed and ethanol grind has slowed and livestock feeding will eventually slow, but supply is a moving target on July 23 and most likely getting smaller as it appears the seed companies indestructible genetics they have been promising for years actually need some rain and cooler temps(in other words they need perfect). Farmer is getting bullish where he is going to have some crop. Farmer always seems to miss the last $1.00+ of most rallies and they are definitely slowing their selling and increasing their buy backs. Spreads are weaker as CU takes a hit, so does CZ.  Still hearing Brazil corn to US. Cash markets are soft and rail bids are tough. Can we locally have an over supply and have a short crop?

Soyabeans---down hard and the shoulder is not coming off the mat yet today, but today goes until 2pm. Weather may become too late for beans as well. Mother nature has been early since March, trees leafed early, blue grass seeded early, corn tasseled early, so why won’t beans be done growing earlier than normal???? Plus traders love to trade the bean/corn spread. And there is room yet for them to buy beans vs corn. currently at 2.07:1…Farmer selling is also slowing as they await $20.00 to average all their “bad” $12.00 sales…China demand? Can we slow demand like we may need to? Market is inverted on tight supplies.

Wheat---spring wheat harvest gets a strong start. Hearing higher protein to this point. Yields better than the farmer thought they would get.  World demand remains routine. Futures have rallied $2-3 in a month. Really didn’t have a reason for the rally so do not need a reason for the sell off. farmer selling is slow. Tin piggy banks will be full when harvest is over in most area. Farmers also becoming forgetful when an open order fills(they forgot about that offer) etc etc. Same old same old.  MGEx is inverted on strong demand, or whatever…KC and CME also losing their carries.

Call if you need anything…aug precip outlook, then newest drought monitor and drought outlook(doesn’t look too good)

Christopher Steinhoff
Market Analyst
651-355-3723 fax

No comments:

Post a Comment