Markets are called weaker this morning behind a weaker overnight session which was partially lead by crop conditions stabilizing versus deteriorating as they had. Also leading to the lower opening calls is weakness in the outside markets as many continue to be nervous of a melt down.
In the overnight session corn was off about 7 cents, beans where off about 9-10 cents, KC wheat was 7-8 cents cheaper, MPLS wheat was 4 cents softer, and CBOT wheat was off 5-7 cents. At 9:20 outside markets have European wheat down about 2 %, crude is off about a buck a barrel, equities are softer with the DOW down 72 points, and the US dollar is firmer with the cash index at 74.011.
The outsides are off of their lows so perhaps that gives a little bit of support to the grains?
Fundamentally the biggest change I have noticed as of late is the softer basis for some of the commodities or as some would put it the market showing more supply then demand; that in it self is a little scary as it really feels like supply is light and producers are not very willing sellers. So what happens if we reach a point when most become willing or have to sell sellers.
Quality on wheat has been very challenging as of late and I don’t think that is exactly good if we want to keep demand coming our way; poor yields do take supply off the table but sometimes poor demand takes away demand faster then pro yields takes away the supply.
Protein scales have been jumping all of the place the past couple of weeks; look for that to continue and until the market has more demand then supply I would tend to think that one will continue to get paid less and less for protein; I have seen some that just a few weeks ago where paying over a dollar a bushel a point above spring wheat basis of 14; that are now paying 0 premium above 14 pro.
The birdseed market remains on the slow side or at least the buyers are not panic looking for product.
Overall fundamentals feel like they are slowing switching as old crop demand has slowly slide the past couple of months and projected demand for next year is smaller in most of the grains then what it is pegged at for this year’s crop.
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