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, July 12, 2012
Morning Note - From Country Hedging's Joel Fitch 7-12-2012
Markets are rebounding after yesterday’s report. Again
for the corn it felt like the USDA was being pretty realistic for what we
know. On the beans I think that they are underestimating old crop exports
and could be underplaying new crop demand. Little more bullish wheat news
out of Russia as the Stavropol region is worse than previously estimated.
Weather today is dropping some moisture in the Delta and up
into Tennessee. There could be light chances in IL, IN, and Kentucky, but
Friday is the more likely chance to get anything. It feels like it only
really matters for the beans in a lot of locations. The 1-5 and the 6-10
are still for above average temperatures and for limited chances of rain in the
ECB. The delta should be improving with the weather pattern.
Estimates for the corn crop are now ranging between the high
130s and the low 140s. As we continue to tighten the corn market I think
that there is more potential demand to ration. We traded a good portion
of last year with a carryout of near 800 mb and traded below the current corn
Corn spreads have become quite minimal with the tightening
of the supply. This market should invert shouldn’t it. Especially
for the western corn belt, you are going to have to manage with inverses or at
least very limited carries. Depending upon profitability of the ethanol
industry corn should want to move East more than usual with Chicago Beyond and
the river being a good market.
Export sales were good for old crop soybeans again, we just
haven’t stopped demand at these prices and that suggests that new crop demand
could be stay robust at these prices as well. Corn sales were okay 173
tmt old/ 492 tmt new. Wheat was 312, kinda poor.