Wednesday, July 17, 2013

Opening Comments 7-17-2013

Markets are called mixed this a.m.  behind a mixed overnight session as we continue to trade the weather forecasts.

In the overnight session corn was down 3-4 cents, KC wheat was up a penny, Soybeans were down 1-5 cents, MPLS wheat was up 3, and CBOT wheat was up 1.  Outside markets have the US dollar softer by 100 points or so at 82.40 on the cash index, gold is about unchanged at 1290 an ounce, and crude is about unchanged at 105.85 a barrel.  The stock market looks to open up about 30 points higher based on the DOW futures.

For the grains it is and has been about a couple things.  First off the funds have been rather short some of the grains so we have seen some hints of short covering the past few days.  The headline driving some of the short covering or maybe even flat out buying has been weather and crop conditions.  There is a concern with weather and pollination of corn.  So the two big things are the funds and weather as it relates to production possibilities.  I have seen production possibilities all over the board and that headline to have the funds buy….buy……buy……….hasn’t been seen lately.

The other big headline I seen yesterday was ethanol Rin’s out to new all time prices.  Ethanol plants and corn basis have been everywhere lately; I have heard of a couple saying they are covered until new crop; while I have seen others get very aggressive on bids.  Very volatile game right now; watch for lots of games to be played for both corn and soybeans.  On the bean market I have seen on processor bid things with a 50-60 cent inverse for beans from now to August; while I have seen another bid it with a small 4-5 cent carry. 

Things for old crop are all over the board for a lot of grains; in my opinion the old crop situations don’t seem to be solved.  But each day that we get closer to new crop the old crop situations get closer to being solved.

Today we will have ethanol numbers out; later this a.m.  Watch that for direction.

I did get an email today from a buyer indicating some inverted protein scales for some HRW in some areas.  Discounting 13 pro.  Not sure how that will develop but it was interesting to see.

It sounds like China is in trying to buy some more wheat; I seen some talk of 500 tmt Australian wheat this morning.  I read something that it might be milling wheat; which would be good.

Bottom line is that China might be one bullish card or at the least a wild card that could help our prices.  Is it enough to keep prices supported?  Or trigger fund buying?  I guess that remains to be seen.

We will have our marketing meeting in Onida at 3:00 this afternoon.


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