Markets are choppy this a.m. with a lack of new news.
Around 8:45 markets have corn off a nickel, beans are off 9
cents, KC wheat is about unchanged, MPLS wheat is up a penny, CBOT wheat is off
2 cents, the US dollar is very strong and that is adding a little pressure to
the grains up 500 points or so with the cash index at 79.587, equities are a
little weaker with the DOW off 40 points, and crude is off about 30 cents a
barrel.
We did have export sales out this a.m. and they continue the
same trend; good on beans and wheat while horrible for corn. Corn sales
where horrible at 2.8 million bushels; by far the worst ever for this week in a
marketing year; the previous low was 19 million bushels. Bottom line
harvest is typically a time when we see a little export demand; but not this
last week for corn.
Soybeans are a whole different story; they were 26.2 million
bushels and only 2 weeks into the marketing year we already have 75% of the
total year’s goal on the books. This is very bullish but is also known
and part of the reason beans are where they are at.
Wheat continue to be in line to slightly better than
expectations; but slightly below what is needed on a per week basis. Keep
in mind that most of our wheat exports are not suppose to hit until the Black
Sea area runs dry on what they have.
Keep in mind that some of the headlines the past couple
weeks haven’t changed. First off we still have very tight balance sheets;
projections are that we will need to curb demand historically because of the
small crops from the drought. The world wheat situation continues to
tighten up with many exporters getting close to running out or projected to run
out……….maybe run out isn’t the correct phrase but have very tight stocks that
leave them uncomfortable. Demand remains very solid for beans as
shown by today’s export sales. Ethanol demand has picked up a little bit;
yesterday’s production numbers where the highest in 11 weeks. Profit
margins for some of the livestock industry are very good for some of the
deferred slots.
The above are just some of the positive or bullish things
out there; most of them in my opinion don’t say the markets need to go up
today; or anytime soon. They just paint a bullish picture out several
months down the road should things not change or should we do something to take
away from supply or add demand.
Also not changing much have been the headlines causing
weakness lately. Harvest progress is going great; with yields generically
better than expected and no weather issues. Funds remain long; probably
too long and we have seen some technical selling along with fund
liquidation. Issues over sea’s that could lead to possible trade disputes
between us and China; the Japanese Chinese conflicts. Idea’s that acres
are increasing based on higher FSA acres.
Bottom line is we can see both some positive and negative
things in our markets; so at the end of the day our recommendation is going to
stay the same of getting yourself and your operation comfortable. If you
need help with your marketing plan please give us a call.
Thanks
Jeremey Frost
Grain Merchandiser
Midwest Cooperatives
800-658-5535
800-658-3670
605-295-3100 (cell)
605-258-2166 (fax)
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