Thursday, August 22, 2013

Opening Grain Market Comments 8-22-13

Markets are called weaker this morning behind a weaker overnight session.

In the overnight session old crop corn was down 2, new crop was down 5 cents, KC wheat was 2-4 cents lower, MPLS wheat was off 4 cents, CBOT wheat was down 4, and soybeans were down 13 in the Nov contract.  At 8:00 outside markets have crude about unchanged, the US dollar firmer by 300 ticks or so with the cash index at 81.52, gold is up 5 bucks, and the DOW futures are pointing towards a positive start of about 50 points.

Weakness in the overnight session seemed to come from a radar showing some moisture in parts of Iowa, Nebraska, Illinois, Wisconsin, and MN.  It doesn’t look very wide spread; but I did see some areas on showing up with ½ inch to as much as about 1 ½ inches.  A little late?  Or just in time?  Either way probably doesn’t matter as the main headline that the funds will see is some moisture in some areas that could really use it.  Sure plenty more areas still need plenty more moisture but keep in mind that the funds tend to trade perception more than reality.

We did have export sales out this a.m.  Wheat came in at 18 million bushels which was in line with the market expectations and above what we need on a per week basis.  Total commitments are up 40% from last year; but some in the industry question if we can hit the 14.9 million bushels per week that we need with solid exports expected out of the Black Sea region.  One important thing for wheat sales is the fact that the trend the past few weeks has slowed dramatically over the past couple of months.  In early June into July we had several weeks of 20-30 million bushels with one week over 35 million and another over 50 million.

Soybeans sales and soybean commitments year to date are good for new crop soybeans.  Coming in at 34 million and 692 for the upcoming year; but the sales today were well below the market expectations.  The market had expected 1.35-2.00 MMT this week; but we only came in at 926k tones or 34 million bushels.  Old crop sales for beans were 800,000 bushels.

Corn sales were also disappointing.  Old crop at 2.3 million bushels and new crop of 17.1 million bushels.  Combined sales of 493k tones were below market estimates of 550-750k tones. 

For more info on the exports you can check out CHS Hedging export sales recap.

The other news to watch is more pro farmer crop tour.  The thing to keep in mind on this is the variance potential in the sampling methods.  Don’t get me wrong it is very good info; but it shouldn’t be as accurate as the USDA.

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