Opening Comments 6-3-2013

Markets are called better this a.m. behind a very firm overnight session lead by soybeans.

In the overnight session New Crop November soybeans were up 25 cents a bushel, old crop beans up 25-27 cents a bushel, KC wheat up 4, MPLS wheat up 6, corn up 5-6 cents, and CBOT wheat was up 6 cents.  At 8:20 outside markets have a US Dollar down slightly at 83.270 on the cash index, crude is up 65 cents, Gold is about unchanged, and equity futures are pointing towards a positive 70 point start for the DOW.

Weather; more concern that we are losing acres and yield is the story this a.m.  The concern seems to have shifted a little from corn focus to soybean focus.  But bottom line is guys are looking at weather and the cooler and wet forecasts are not allowing things to get done.  Thus we have a little more weather premium being built into the market.  Plus we also continue to have very strong soybean meal demand.

The question should be do we have enough weather premium built in?  Or do we need to continue our little rally that has seen about a buck and a quarter rally for new crop soybeans and 60 cents for new crop corn.  If you look at per acre basis that is rather significant.  $30 to $100 bucks or more depending on yield.  Perhaps enough of a rally to reward the rally a little bit for those that are fortunate enough to have things in the ground?  The trend is your friend and if I had plenty already sold that I was comfortable I wouldn’t get over aggressive; but for those that feel they are undersold this is the best spot we have had in months to make some catch up sales.

Plus fundamentally plenty of arguments are out there on the balance sheets.  Some ideas are that we have yet to make any major changes to our carryout numbers.  I guess only time and mother nature will really know the production answers.  For the demand side we do know that we have super strong old crop demand but many question the present new crop demand outlook.  Many ideas are that if the USDA lowers production they will lower demand similar.  Bottom line is things look friendly for prices today; but weather markets change in a hurry.

As for news; this a.m. we will have export shipments out.  Wheat has been strong lately with corn and beans lagging.  This afternoon we will have a crop progress out and we might see the corn conditions.  Ideas are for the bean crop to be about 60-65% planted and the corn crop to be around 90-92% planted with 50-65% of the crop in G/E condition versus 77% last year.

It sounds like Japan will be holding back shipments on some US white wheat that they had bought; this is from the GMO story out last week.  So far testing has been negative.

We should see more harvest results from some areas down south this week.  But some areas are getting some moisture that will push things back.

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