Markets are called better this a.m. behind a firmer
overnight session. Dead cat bounce? Or reversal in the happening?
In the overnight session corn was up 4-5 cents, KC wheat was
up 2, MPLS wheat was up 3, CBOT wheat was up 3, and Soybeans were up 4-6 cents. At 8:20 outside markets have a US dollar
about unchanged at 81.637 on the cash US dollar index, crude is down 70 cents
at 103.84 on the September contract, gold is off 4 bucks, and the DOW futures
are pointing towards a positive 40 point start.
Not much new news that I see out there this a.m.; the main
headline is markets overdone and due for a bounce and weather. On the weather front we see more talk about
the crop falling further behind; but the main headline that the funds seem to
be focused on is cool and wet which has to be considered bearish prices and
leads to a bigger crop. As I mentioned
yesterday I think we have some potential issues down the road; but it is hard
to argue the fact that corn is filling much better in the weather we have had
this year versus what we had last year.
Yes hit and miss areas are bad; but the question I still see out there
is..... “ is this crop only 33 bushels bigger than last year’s?”
I have seen some advisors and others in the trade talking
about much bigger corn yields. Not going
to argue whether that is agronomically correct; but it is the headline the many
are throwing out at this time.
Crop conditions didn’t provide much market direction
yesterday with most of the conditions steady.
Soybeans dropped; but that was it.
We did sell some soybeans to unknown this a.m.; most likely
China.
Also looks like Egypt is tendering for some wheat; doesn’t
look like the US will get any of that business.
Wheat exports overall have been solid and if we can keep up the pace and
get more swing business you could see talk a tighter US wheat balance sheet; so
perhaps wheat can lead us higher????
It looks like Japan has resumed US white wheat imports;
after having that GMO wheat headline a few months back.
Also looks like the EU raised their wheat crop estimate to
131.7 MMT versus the 128.9 MMT they previously had.
This morning I had a not good conversation for winter wheat
and basis. I was applying a train of HRW
out and the buyer didn’t want the train because it was too high and
protein. In the past few days I have
seen more than one comment about max protein levels for contracts. My comment back to the buyer was it might be
a struggle today but won’t these mills want the higher protein winter wheat if
North Dakota spring wheat ends up being 12 or 13 pro. His thoughts were if that happened we would
just completely kill the mill demand for winter wheat.
Now don’t get me wrong there are still some markets that are
and will look for protein; such as the gulf market. But as it sits right now I scratch my head
when I try to figure where one will go with 14 pro winter wheat from locations
that don’t spread well to the export markets.
I think the old crop corn market is still in discovery
mode. No clue what I can sell today; but
also not a very good handle on what it would take to actually buy some corn from
the producer.
A lot of our markets are like that; very soft bids; but has
anything actually traded much cheaper than it did a week or two ago? Not much for some of the grains is my
opinion. Don’t get me wrong we still
have a huge inverse between old crop and new crop and at some point they come
together for the row crops. I just don’t
know if that day is as soon as it appeared based on the recent basis weakness.
Sunflower market is very similar. Bids are ugly; but I don’t think I can
exactly buy sunflowers much cheaper then I could a week or two ago. The thing end users need to realize is that
producers don’t have to sell it cheaper just because they say they want to buy
it cheaper. Be it corn, soybeans,
millet, milo, sunflowers, and even wheat.
Many producers don’t have to sell it period; but end users need to
always buy and stock their shelves or have their end product for sale.
Please give us a call if there is anything we can do for
you.
No comments:
Post a Comment