Monday, August 20, 2012

Country Hedging's Midday in the Markets 8-20-12

Midday In The Markets

Corn is up 12c  after a slow overnight session with the market trading on a lack of new fundamental news and traders trying to figure out what prices will curb demand even more. Reports from early harvests have been worse than expected so far. Many eyes will be on the Pro Farmer crop tour that began this morning. You can follow along throughout the week with updates from our twitter account @hedgeit. Early reports coming from SE South Dakota have not been good with very low yields and many fields already chopped. Soybeans are stronger on a drier weather outlook and continuing strong demand.  Export sales are higher than USDA projections so far this year and there is still strong demand from domestic crushers. Analysts expect bean conditions to increase 1-3% in this afternoon’s crop progress report. After trading lower overnight and throughout much of the early morning wheat has turned higher on the heels of corn. The USDA’s weekly export inspections report has been delayed until 2pm CST today due to technical difficulties.

Live cattle futures continue to rise with a strong cash market due to increasing demand ahead of Labor Day. Feeder cattle have been trading two sided today and are currently trading higher. Lean hogs are trading lower at mid-session after early gains.  Traders are concerned with increasing supplies and high feed costs as corn is trading higher today. Analysts expect this week’s hog slaughter to be the highest since January at 2.2 million head. The August cattle on feed report was neutral with fewer cattle placed and marketed.  Cattle added to feed lots were 10% below last year’s value, but 8.5% above the five year average. Marketed cattle were at 100%.

US stocks are trading lower across the board amid concerns of the ongoing European debt situation and after the nation’s number two home improvement store missed earnings expectations. Traders are keeping an eye on Greece as their Prime Minister meets with Germany and France this week to discuss extending the deadline to meet their fiscal responsibilities. Crude oil is also trading lower due to Europe’s economy and is back below $96.  Drivers are buying the most expensive gas on record for August 20th at a national average of $3.72. The higher prices are due to interruptions in the supply chain and stronger crude oil prices. Analysts expect prices to rise until after Labor Day. US$ is trading lower while gold is higher.

Lance Kuhlmann

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