Markets are called mixed on a mixed choppy overnight
session.
When the overnight session paused July corn was up a penny a
bushel, new crop December corn was off a penny, KC wheat was up 2, MPLS wheat
was up 4, CBOT wheat was up 5, and soybeans were 5-7 higher. Outside markets have crude up about a buck,
gold back to about unchanged, the US dollar is up a little with the cash index
at 82.351, and stock futures are pointing to a 120 point positive start in the
DOW.
Looks like the stock market strength is coming from this
a.m.’s employment numbers as the jobless rate dropped slightly.
We also had Stat’s Canada numbers out this a.m. and both
Canola and Wheat came in below trade estimates.
Yesterday the wheat tour concluded and it came in above what
most of the bulls were looking for. Production
was at 313 million bushels for Kansas versus 382 last year. Yield was 41.1; but harvest percentage based
on the March planting report would equate to about 82 %; the lowest since 1996.
If you use the yield of 36 like some in
the industry are it would drop production down to about 274 million
bushels. I guess we will have to wait
until the combines roll; but bottom line is the crop report probably just
opened up more debate on the crop size down south.
We did see overnight lows in the upper 20’s to lower 30’s in
various parts of the HRW belt both yesterday a.m. and this morning. Keep in mind that isn’t the area that has all
of the good wheat; but it is also supportive.
Weather in general seems to be a little mixed for the corn
market. Plenty of spots are getting or
have got some moisture the past day or two; but the some of the deferred
forecasts open up a little bit. Bottom line on weather is Sunday nights
forecast likely determine whether this week’s strength holds, gains, or takes a
step back. We will have a couple days
without trading so what the forecasts look like come Sunday night should really
determine what our next move is. Keep in
mind that we might have the added pressure of rain makes grain at any
time. Monday we will have crop progress
as well; which will show us well behind; but did some work get done in the past
week before the corn belt got its present system?
Some areas are getting very behind in planting and this
could make this planting delays a major event but keep in my that our present
new crop balance sheet says we need to increase demand year over year or not
have the type of supply that has been thrown out there. Losing a few acres won’t kill our new crop
balance sheet for corn. Whether we end
up with yields of 120-150-170 is what is going to make or break our corn
market. Losing a couple million acres
just helps us keep that low price estimate that some advisors have out there
should our yield end up in the 150-170 range.
Even though there is some debate as to how big the wheat
crop is the bottom line we need to remember is that the headline from the crop
tour was a bigger then expected crop. It
could lead to some of the bulls squaring up or looking for a better spot.
Please give us a call if there is anything we can do for
you.
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