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.
Tuesday, August 14, 2012
8-14-2012 Overnight Highlight's from Country Hedging's Tregg Cronin
Below are overnight highlight's from Country Hedging's Tregg Cronin
Outside Markets: Dollar Index
down 0.048 at 82.390; NYMEX-WTI up $0.30 at $93.02; Brent Crude up $0.13 at
$113.73; Heating Oil up $0.0138 at $3.0321; Cattle are firmer, while hogs are
weaker; Gold up $0.90 at $1610.50; Copper up $0.0145 at $3.3735; The Yen is
weaker, but the other major currencies are firmer; Cocoa, Sugar and Cotton are
all trading better; S&P’s are up 3.00 at 1405.50, Dow futures are up 27.00
at 13,164.00 and Treasuries are offered this morning.
World equity markets are firmer
today as economic data from Europe showed the core countries aren’t slowing as
much as feared. Both the French and German economies slowed less than
forecast in the second quarter with France unchanged vs. -0.1% estimated and
Germany +0.3% vs. a +0.2% forecast. While those two avoided a larger
slowdown, Italy and Spain are back in recession and the entire euro-area GDP
dropped 0.2%. Portugal’s economy declined -1.2%, its seventh straight
quarter of contraction. The rating agency Moody’s did drop the outlook on German
credit to negative from stable, but retained its Aaa rating. Also worth
noting, Greece sold €4.06 billion worth of 13-week bills with a yield of 4.43%,
up from 4.28% at the end of July, a negative sign. Yields are mixed in
Europe this morning with AAA rated nations higher and PIIGS lower.
Economic data of note in the US today will include the Producer Price Index,
Retail Sales and Business Inventories. Also, The Volatility Index on
options on the S&P 500 hit a 5-year low of 13.70%. All is well.
Rains in the last 24 hours were
confined to the ECB including IL/MI/OH while additional rains also fell in the
Mid-south and South as KY/TN/MS/AL also picked up rains. IN & OH saw
totals in the north as high as 0.50-1.00”, but coverage was less than 15% for
those totals. Most areas were dry. The radar currently shows rains
moving across OH and KS, which will be welcome news to wheat farmers. The
1-3 day forecasted precip map will keep the Dakotas dry, while
NW-IA/MN/N-WI/MI/N-IN and a separate system in OK/AR/N-TX should bring sizable
rainfall. The upper-Midwest storms should drop 0.40-1.00” in most areas
while the Southern Plains should bring over an inch to the entire state of OK
& AR. By Fri-Sun, the WCB will be dry, while storms are possible SE
of a lien from Tulsa to Toledo. Private 6-10 day maps stay on the dry
side while the 11-15 holds better chances in the West. NOAA stays dry and
has temps well below normal throughout. Indian rains are improving and
there is no notable shift in the Australian forecast.
Grain markets are letting loose a relief bounce overnight,
but it doesn’t look to be much more than that. Condition ratings came in
as expected on soybeans and corn, and harvest progress on wheat remained above
normal. Wasn’t much more to last night’s crop progress report than that
as the crop remained ahead of schedule on development. The only
deliveries in the soy complex overnight included 167 soybean oil, no meal and
no beans. One can make the argument yesterday’s sell off was needed as
it’s still difficult to quantify what the turn to favorable weather is doing
for the soybeans. The uncertainty alone is enough to keep this market
two-sided near $16.00. Corn doesn’t want to break much, and shouldn’t,
while wheat lacks the fundamental demand story to push higher.
Headlines from last night included Japan tendering for
70,865MT of milling quality wheat, all from the US. The total included
46,115MT of DNS. NOPA is set to release member crush statistics later
this morning with the market looking for crush near 131mbu, although some
estimates are as high as 134mbu. More Russian chatter overnight as well
with SovEcon estimating the crop at 40.5-42.5MMT (USDA was 43 on Fri) while
Agritel is pegging it at 41.3MMT. SovEcon also said yields in the Volga
district were half yr-ago levels. Their estimate of the Urals area was
near half as well (2.4-2.7MMT vs 5.0 LY). Their Siberia estimate was
7.2-7.7MMT vs. 9.8 LY. Agriculture and Agri-Food Canada said earlier
today Canadian wheat production, including durum, may rise to 26.7MMT vs.
25.261MMT a year ago. Wheat excluding durum is estimated at 22MMT vs.
21.089 last year. Canola is pegged at 15.7MMT vs. 14.165MMT
previously. Lastly, the Australian Bureau of Meteorology said climate
indicators remain close to El Nino thresholds. The Central Pacific
continues to warm.
Open interest changes yesterday included wheat down 4,320,
corn down 930, beans down 3,770, meal down 940 and soy oil down 2,760.
Chinese markets were down swiftly last night with beans down 18.75c, meal down
$6.40, soy oil down 58c, corn up 3.25c and wheat up 0.75c. Malaysian Palm
Oil was down 13 ringgits at 2,858 (Oct). Paris Milling Wheat is up 0.29%,
Rapeseed down 0.05%, UK feed wheat up 0.82% and Canola up 0.03%. CIF corn
barges traded down to the lowest level since January yesterday as the market is
having a difficult time swallowing the early Southern Plains harvest hitting
the market. This will keep pressure on the CU/CZ which is 0.25c weaker at
-9.75c overnight. ND elevators continue to take bids from the
Chicago/beyond market due to PNW issues and ECB shortages.
Call things better to start with on a turnaround
Tuesday-type bounce, although some intra-day selling wouldn’t surprise.
The forecasts are less threatening, cash markets and spreads are on the
defensive because of early Southern-harvest, and conditions are stabilizing
across the crops. ND has about 1/3 of their spring wheat to harvest yet
while Canada’s haul is just getting ramped up. Markets feel like we’ve
got the supply side threats priced in for now and the focus is rapidly shifting
Trade as of 6:55
Corn up 5-6
Soy up 8-15
Tregg Cronin Market Analyst 800-328-6530 651-355-6538 651-355-3723 fax www.countryhedging.com Country Hedging, Inc. The Right Decisions for the Right Reasons