Markets are called mixed this a.m. behind a mixed overnight
session.
When the overnight session ended old crop corn was up 2
cents a bushel, new crop corn was down 2 cents, KC wheat was down a penny, MPLS
wheat was up a penny, CBOT wheat was down 2 cents, old crop soybeans up a
penny, and new crop soybeans down 8 cents.
At 8:15 outside markets have crude off about 50 cents, the US dollar off
a couple under points with the cash index at 84.039, gold off 11.50 an ounce,
and stock futures pointing to about a 15 point lower start for the DOW.
Old crop firmness still being seen as producers are not
really interested in selling much old crop grain. Weakness in the new crop seems to come from the
idea’s that we will show a record planting progress in this afternoons crop
progress report. I have seen just a huge
range of estimates; most seem to line up that the market is looking for 60-65%
corn planted and 20-25% soybean planting.
The one comment that I have seen is the fact that these reports usually
lag.
Weather has halted planting in our area and other areas in
the Western Corn Belt; but it looks like the eastern corn belt continues to
make progress. Our area the moisture
helped greatly and I would think it leads to some more producer interest in
marketing some grain. ND did see good
moisture too and that might curb some acres in both spring wheat and corn.
Overall I think weather is still a wild card. Today’s crop progress report will tell us if
we are in a “rain makes grain” state or if we are still concerned about the
lack of progress and possible yield losses along with acre losses. Usually the Monday afternoon reports are old
news fast; but today’s might be a little more important than normal.
This morning we will have export shipments out at 10:00.
I did see a estimate that increased Russia wheat crop this
a.m. We to keep in mind that we are not
the only wheat exporter in the world and we typically only export a little
under half of our crop size. So if we
don’t have a crop to export and other countries do we might not have a major
change in our ending stocks. Our
domestic use for wheat is about 1.3 billion bushels this last year and about a similar
forecast for this coming year. If we have
a carry in of 731 million bushels; we only need about ¼ to 1/3 of a crop to
satisfy our domestic needs and that’s assume that wheat for corn stays
strong. We have some issues in HRW; but
the SRW wheat crop looks to be plenty big and spring wheat is still up in the
air; but I know guys that have it planted are sitting well. Bottom line is that for wheat to really rally
we probably need an issue someplace else in the world. The issue in hard red winter wheat country is
known; but it isn’t enough by itself to cause a major rally like we would
like. It could be if the funds decide to
run it with a headline; but at the end of the day we will need some
demand. It will be hard for us to see
demand if our competitors are swimming in grain.
One possibility that this afternoon’s report has is acting
like a sell the rumor event. Meaning
everyone is expecting a huge corn crop progress number. If we get it what reason will they now have
to sell us off? Could the market start
looking at the fact that many areas to the east of us may have lost some yield
potential? It just seems to me that old
crop stocks are so tight and basis is so strong that it should have some spillover
effect to new crop. I don’t know that it
is enough to take new crop prices higher but could it stall off the pressure
until later?
Please give us a call if there is anything we can do for
you.
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