Wednesday, June 19, 2013

Opening comments 6-19-13

In the overnight session July corn was off 7 cents, December corn was down 1, KC wheat was unchanged, MPLS wheat was up a penny, CBOT wheat was down 2, July soybeans were unchanged, and November soybeans were unchanged.  At 8:30 outside markets have the DOW about unchanged, crude about unchanged, the US dollar unchanged, and gold up 4 bucks.

The main headline I am seeing this a.m. is favorable weather.  Yesterday there was talk of a heat dome and that helped spike corn up a little as did some unwinding of spreads; but more look as heat as needed for the crops.  As long as it isn’t a super long hot and dry period warm weather will help development for the most part. 

We will have ethanol numbers out later this a.m.; most are looking for similar numbers to last week.  A little talk of ethanol imports is out there; something that we will need to watch.  But here again will imports really be bullish or bearish?  If we can’t produce enough ethanol our self is having to import it bullish or bearish?  Depends on the view I guess.

Overall my view on ethanol remains very bullish; I think the margins are very strong and the tight stock situation with the margins and lack of coverage is just a huge explosive situation.  Fireworks; not all good fireworks but huge volatility in the days to come.  Ethanol plants and other end users not having coverage for July/August is simply scary; but so is the inverse to new crop.  In the end someone will probably get paid very well; but the next few guys to sell might end up with new crop values.

INFORMA will be releasing acre updates later today around 10:30 central time. 

Wheat prices are back down near the levels that China bought the last couple of days; some are wondering if they will be in again?

Watch for more harvest updates; of which I haven’t seen many.

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