Tuesday, July 23, 2013
Opening Grain Market Comments 7-23-2013
Markets are called mixed to weaker this a.m. behind a weaker overnight session lead by the weather headline of cool during pollination.
When the overnight markets closed or paused corn was down 7 cents, KC wheat was down 2, MPLS wheat was unchanged, CBOT wheat was down 4 cents, August soybeans were down 5, and November soybeans were off a penny. At 8:20 outside markets have crude off a buck, gold off 5 bucks, the US dollar about unchanged, and DOW futures look like they are pointing towards a bounce of about 40 points on the opening.
A little disappointing price action for the corn market. Yesterday afternoon we had crop conditions drop 3% which was on the high end of the range that most were expecting. Yet corn didn’t even manage to get back to unchanged once on the overnight session. Why?????
Weather is what most are saying. That some parts of Iowa got some moisture. When I looked at http://www.cocorahs.org/ It looked fairly spotty to me. But you did get some areas in Iowa and other parts of the corn belt that got some moisture. Enough???
The other negative for weather is when you look at a radar you have areas that have some green showing up right now and other areas that had some green last night. Enough moisture actually hitting the ground??? Maybe it doesn’t really matter to the funds.
The last thing on weather has to be the forecasts which right or wrong are reading as a headline of cool with some moisture during pollination.
Technically the new crop corn chart is starting to look a little scary. As we made a new low this morning; the December 13 contract got to its lowest spot since November of 2010. We have to wonder if the funds will try to press this thing even lower.
Below is an article from Bloomberg. Note the headline that the funds are seeing of 6.8% above the 2007 to 2011 crop.
Illinois Corn Yield Potential Jumps From 2012, Doane Tour Shows
By Jeff Wilson - Jul 22, 2013 11:52 PM CT
Corn yields measured in the western third of Illinois, the third-biggest U.S. grower, were projected higher than a year earlier as warm temperatures and adequate soil moisture boosted plant populations, according to the Doane Advisory Services Co. crop tour.
Yields measured yesterday from St. Louis to Sterling, Illinois were 183.3 bushels an acre, 60 percent higher than a year earlier when the worst drought since the 1930s damaged crops. They were also 6.8 percent above the average from 2007 to 2011, based on field inspections during the first day of the 30th annual Doane tour. Yields ranged from 168 bushels measured in Macoupin County to 198 bushels measured 250 miles north in Whiteside County.
“The fields that were planted closer to normal dates have high yield potential” because plant populations in the western third of the state are above average, Marty Foreman, a senior economist at Doane, said from Cedar Rapids, Iowa. “While plant population were consistently high, the 20 percent that was planted two to three weeks late could see yields fall by a third to as much as half.”
Futures on the Chicago Board of Trade tumbled 29 percent this year, signaling lower food prices and reducing expenses for producers of livestock feed and ethanol. The U.S. harvest will climb to a record 13.95 billion bushels, the Department of Agriculture estimates.
Corn in Illinois was rated 65 percent in good or excellent condition on July 21, down from 69 percent a week earlier and just 7 percent a year ago, the USDA said in a report yesterday.
Soybean fields in Illinois graded by Doane economists showed yields were 12 percent higher than that of last year’s drought-damaged crop. Yield potential was estimated at 44.3 bushels an acre, down from 44.5 bushels on average from 2008 to 2012, Doane data show.
“Plant size is variable and that is a direct result of later plantings and dryness in the western third,” Bill Nelson, a Doane senior economist, said yesterday in Cedar Rapids, after traveling more than 360 miles. “We clearly did not see as many outstanding fields as usual and some crops need rain soon.”
Soybeans in Chicago dropped 8.6 percent this year.
About 72 percent of Illinois soybeans were rated in good or excellent condition, down from 73 percent a week earlier and 13 percent a year ago, according to the USDA report.
An estimated 11 percent of the state’s crop was beginning to set pods, down from 36 percent a year ago and 17 percent on average in the past five years, the USDA said. About 27 percent of topsoil was rated short or very short of moisture. Illinois temperatures averaged 3.9 degrees Fahrenheit (-15.6 Celsius) above normal during the week and rainfall in the state was 0.5 inches (12.7 millimeters) below normal, the report showed.
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