Midday in the Markets via Country Hedging

Midday In The Markets

GRAINS

Grains are trading mixed after yesterday’s losses as the market continues its attempts to ration demand. Beans are slightly higher after mixed trading and strong demand by processors. Domestic soybean crushers processed 137.4 million bushels in July which is about 6mb higher than analysts expected. Soybeans continue to receive relief from cooler weather and more rainfall forecasted in the coming days. August bean futures expire today. After trading higher overnight wheat is currently lower as it follows in the footsteps of corn. Corn is currently a few cents firmer after trading mixed.

LIVESTOCK

Live cattle are trading mixed on tightening supplies, strengthening demand, and profit taking after reaching three month contract highs. Feeder cattle are stronger on stable corn prices. Cash cattle markets aren’t expected to trade until late this week with no bids or asks currently. Lean hogs are mixed with August futures expiring today and profit taking after yesterday’s rally. October hog futures are higher on the wide discount to cash prices. Cash hogs are expected to weaken on rising supplies. Pasture conditions were mostly stable in yesterday’s report due to the fact that they can’t get much worse than they already are.

ENERGY & FINANCIALS

US stocks are higher after an unexpected strong July retail sales report this morning showed that consumers are still spending in all major categories. Retail sales rose by the most in five months at 0.8% in July. This is after a 0.7% drop in June. Greece held its largest debt sale in two years as it raised $5 billion in short term debt in order to pay off a bond that matures next week.  Crude oil is up again today on the positive news from the retail sales report while the US dollar also turned higher after the report was released.

Lance Kuhlmann

800-328-6530

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Country Hedging's Mid Day in the Markets 7-30-12

Midday In The Markets

GRAINS

Grains are trading higher on a hot and dry weekend and forecasts are showing that trend will continue this week.  Moisture for soybeans will become ever more important these next few weeks while corn is beyond benefiting from rainfall.  The trade is expecting another drop in crop conditions in this afternoon’s USDA report.  December corn hit a contract high this morning of $8.17 ¼ and is currently up 20c to 8.13.  Wheat has been following corn higher while also being supported by news of global supply issues and Russia looking at suspending grain exports due to low production.  Soybeans are also stronger with the front and deferred months trading about 30c higher.  Corn and wheat export inspections topped expectations with corn at 21.44 million bushels and wheat inspections at 18.6mb.  Soybean inspections were in line with expectations at 15.5mb.

LIVESTOCK

A USDA meteorologist reported that 75% of all cattle herds in the US are located in areas that are experiencing drought.  Live cattle futures are trading much higher than cash prices as beef demand has slowed down and signs of tightening supplies.  Currently nearby live cattle are trading up  .575 to 120.175.  Feeder cattle are trading mixed with another surge in corn prices.  August feeder cattle are .850 higher at 138.600.  Lean hogs are trading mixed today with a rally in corn prices leading deferred months higher and lower pork cutout values that were released after the close on Friday are initiating selling in the August contract. 

ENERGY & FINANCIALS

US stock markets are paying attention to today’s meeting of the ECB’s President, Germany’s finance minister, and the US Treasury Secretary.  They are expected to release a statement at the conclusion of the meeting providing insight into how they plan on turning around the declining global economy.  Spain announced today that its economy has contracted for the third straight quarter.  Crude oil has been hovering around $90 today, but is currently down 44c to 89.69.  The Dow is trading above 13,000 for the first time since May.

Lance Kuhlmann

800-328-6530

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Country Hedging, Inc.
The Right Decisions for the Right Reasons

Mid Day update from Country Hedging's Chris Steinhoff

Crude oil is 25 cents firmer…gold is down $1.00 and silver is  down 15 cents, so your bling bling at pawn America is holding steady…DJIA is 104 points lower…Risk off as the wall Street geniuses with the ivy league education have

Corn----profit taking and radar!!! And we go limit down on CU. Will rain really help the corn crop in the ECB? Well I guess it won’t do any harm but I really have my doubts whether the corn crop is getting bigger today. We rallied 3 bucks with only nominal sell off profit taking, but we are seeing it now, plus flushing the weak longs out. Scattered rains are falling this morning across N and some E growing regions. Certainly goes along way in MN to making a crop, but other areas that have been dry for weeks and months need a wee bit more rain to do much good. Many guesses from the “experts” now are in the 130bpa range and production near 11bb and harvested acres may need to be adjusted lower. But at some point acres lowered may actually stabilize yield estimates. Reports from country all depend on what road is driven and who’s looking, but not all looks terrible and not all looks good. Will not really know until combines roll, and that is beginning in parts of MO already. Cash markets are soft in many areas and some try to transition to new crop values. U/Z is 9 weaker at a 20 inverse. Ethanol plants keep getting by and we haven’t heard of massive  shutdowns anywhere, just a scattered plant here and there. Pollination will be the key and the field surveys for the Aug USDA report may be the timing of the worst news we have factor in and it will be a Friday!

Beans---limit lower with synthetics on SX  down around $15.40+/- as I write this. China is eerily, eerily quiet and the market can ill afford to let demand get a shoulder off the mat. Rain helps beans but can it salvage an average crop out of a crop that has been pot and dry for weeks? Plus SA doesn’t have any beans to sell. Hearing some marketing advisors are saying buy calls as beans are headed to $20-25. Hold on for that ride. SX:CZ is 2.05:1 so there is HUGE potential for a bean rally if corn is steady and someone wants to push that toward 2.5:1

Wheat---sharply lower as a follower of corn as the heat fundamentals have not changed dramatically overnight, could be maybe wheat rallied with corn too far. Cash prices for HRW and DNS across the N Plains are $8.00 to $9.00 and farmer is a seller but maybe should be a bit more aggressive at selling off the combine. Sweep the bin and play the rest of the summer. Not much else really going on. MGEx is finally not inverted, at least thru MWK.

Call if you need anything

Christopher Steinhoff
Market Analyst
800-328-6530
651-355-6558
651-355-3723 fax

www.countryhedging.com

Mid day update for 6-29-2012 USDA stocks and acre report day

Below is mid day update from Country Hedging's Chris Steinhoff

Crude oil is up $4.50, US$ index is 1.16 points weaker…DJIA is 220 points firmer…all seems to be a result of Eurozone bailout fund and EU banks accessing that $...Month end  and quarter end positioning is prevalent.

I’ll be brief…

Corn---report day and the market was kinda volatile for about 5 minutes on either side of the 730am release time. Acres were slightly larger than expectations and about 500k larger than in March. June 1 stocks were 500mb smaller than a year ago according to the survey anyway. Farmer hauls old crop corn, and in many instances is surprised at how many bushels he still has left!!! Amazing!!! ….Garbage into the report, garbage out….Weather still remains warm and dry with a few scattered storms on the radar moving across ILL, but not really in the areas that need rain. Outside market strength and US$ weakness also provides major support. Cash markets seem to be steady at best and exporters seem to have a hard time finding homes for trains.  Domestic users appear to be slowing down with some ethanol plants beginning their scheduled downtime sooner than planned. CN enters first notice day and delivery and finds strength to lead spreads firmer. Not much else as we enter a weekend tasselling corn amidst hot and dry conditions. Are we factoring in the worst possible corn news???

Beans---lead the way in strength on tight world supplies, strong demand and the crop most influenced by world economics. USDA found a few more acres than expected but the double crop bean  acres are at risk because of dry weather. Personally I think those acres will get seeded, but whether they have the moisture to grow is the question ? All else is quiet as farmer selling has slowed, so has farm gate trucks. Be careful on new crop purchases as X forward is inverted.

Wheat—HRW harvest expands into South Dakota with strong yields reported, quality good and protein mixed. SRW harvest moves too. Summarizing KS, it seems the harvest was better than expected volumes. MGEx moves higher and the spring wheat crop looks pretty good in most places. Acres came in about where I expected as we saw a slight increase from March intentions. Stocks surprised me somewhat as it appears the USDA or farmer did not recognize an early HRW harvest. So the next stocks # may find a few bushels. Cash markets are mostly steady. Farmer movement is pretty strong for old crop DNS and steady HRW.

We have a watch box in IN…yoo hoo

Christopher Steinhoff
Market Analyst
800-328-6530
651-355-6558
651-355-3723 fax

www.countryhedging.com

6-11-2012 Mid Day Comments from Country Hedging's Christopher Steinhoff

Below are 6-11-2012 Mid Day Comments from Country Hedging's Christopher Steinhoff

Spain banks get a bailout, but do not know what that really means for their unemployment??? DJIA is 37 points lower..US$ is slightly weaker…Crude oil is  90 cents lower…see CME announcement below

Corn----old crop was higher and new crop was down a couple, the BOOM pit opens at 930 and selling shows up. Must be trading radar as apparently the last system for a week moves into ILL. This system looks to be the last for a week to 10 days and keep hearing that parts of the ECB are not looking good and “burning up”. Well we need a yield larger than ever before to solve our corn balance sheet issue, can we get it? I am not ready to say no but it appears it may become more difficult as it seems today’s hybrids like it alittle too dry than a little too wet. USDA is out tomorrow and they may not change the corn balance sheet much as an early harvest will be in this old crop marketing year. Many expecting corn conditions to decline this afternoon. Export inspections of 17mbis incredibly disappointing as 33mb is needed weekly to achieve the USDA estimate, so maybe it is a good thing China bought some old crop otherwise what would our exports be? WCB looks to be in pretty good shape except parts of NE and KS are dry. US farmer hauls DP in some areas as “free” is what they like. A few are doing some pricing. $5.00 cash may be a price where they begin to sell some new crop, but time will tell on that. Spreads are firm as CN gains a nickel on everything else. We will begin the transition from old crop to new crop at some point so manage your cash and futures positions!!!!!!  Z/H is an 11 ¾ carry. Movement is slow enough basis remains firm. Could be some pre report positioning.

Soyabeans----same weather for beans but beans have time to be helped. Many expect the USDA to tighten old crop  carryout tomorrow to sub 200mb. Supplies seem tight as we keep shipping beans and crushing beans. Export inspection were 14.2mb, well above the  11 mb needed weekly. Looks like there may be some spreading of buying beans and selling corn as the SX:CZ is 2.48:1 and some believe it could go to 3:1. Farmer selling is light. Many still believe SA will run out of shippable soybeans sooner than later---but maybe their farmers are a lot like the US farmers who ALWAYS have more at home than they tell us. Here too the WCB seems to look better than the southern or ECB, but it is only June 11 and we have plenty of time. Biggest question is how many acres got planted? 74? 72? Or 76? Big USDA report is on June 29 on acres and stocks. Could be some pre report positioning.

Wheat----firmest for the first few hours this morning, why? Not following corn, not trading HRW harvest as yield reports definitely have a shot at a 400mb Kansas crop. Do we have a lot of pent up demand? Doesn’t really look like it. First weekly export inspections of the new marketing year were 21.5mb. Most DNS areas look very good as even a few of the dry areas actually got rain this weekend. Specs are buyers as we bounce out of last week’s lows. US spring wheat farmer is quiet and we are getting to where the winter wheat farmer will seed double crop beans if he has the moisture to do it.

Overall pretty quiet in the world as Egypt may begin to tender again. World and US have plenty of wheat!

Floor Opens at 7:20 a.m. CT for CBOT Grains and Oilseeds Tomorrow--June 12, 2012

As previously announced, pending CFTC review, floor trading for CBOT Grain and Oilseed futures and options will open at 7:20 a.m. CT on Tuesday, June 12 in advance of the release of two major USDA reports: Crop Production and World Agricultural Supply and Demand Estimates. Note that the current floor close (1:15 p.m. CT) will still be in effect on this date.

Christopher Steinhoff
Market Analyst
800-328-6530
651-355-6558
651-355-3723 fax

www.countryhedging.com

mid day 6-7-2012 - Comments from Country Hedging's Chris Steinhoff

Below is the mid day update from Country Hedging's Chris Steinhoff

Choppy, choppy, choppy…Crude up $1.80 then only 70 cents, then $1.50 higher, then 60 cents firmer…Gold and the US$ are weaker…DJIA is 86 points better…FED bernanke’s words were a little disappointing to the $.

Corn----sharply higher early in modest volume but has backed off as the outside markets have backed off. Weather, tight cash market and World economic(china rate cut) are the main drivers, so too is the fact the GSCI roll begins today, and some may be playing ahead of that.  Export sales were slow on corn as the month of May corn sales were pathetic. Japan and Mexico were biggest buyers, unknown cancelled 50tmt. The USDAs 1.7bb export total is at risk. Weather across parts of US corn growing areas has been dry, and by reading crop comments on AgWeb there doesn’t seem to be a good cornfield anywhere in the US. Meanwhile the crop gets closer to tasseling across Southern and eastern growing areas and they could use some rain. Weather forecasts are turning drier next week with coverage and amts seemingly no better than 40% of 1/10 to ¼ inch. Spreads vs CN are a nickel weaker and delivery values along the ILL are cheaper than the strong cash market. US farmer sells very little old crop or new crop, instead waiting for the rally, even though CN was $6.30 in May, $6.70 in March and $7.80 last August! But weather and $ rule, and until rain falls or forecasts make a complete change things may be very well supported, at least until the Wall Street casino sells. Black Sea region has received rain and they may be exporters, Brazil crop looks large they may export more. China may OK Brazil origin

Beans---25-30 higher. Funds are long a lot of beans and meal. Farmer movement is quiet as 500 bushels generates some decent cash. Weather is not as critical at this stage for beans, but rain wouldn’t hurt. News is pretty light. Export sales were decent but the slowest of May. USDA may need to raise the export guess.  Brazil farmer has sold and trucked a lot of beans supposedly as some traders feel Brazil WILL run out of exportable supplies at some point. Market still depends on China for the demand in the world and US crusher keeps crushing but is having a harder time buying. Spreads are a little weaker vs SN. Sx/SF is a slight carry with the uncertain crop and acres. If moisture allows, double crop acres should be big.

Wheat---HRW harvest finds a better crop than farmers thought. As combines are now stretching across a big section of KS, or will be by next week. ND gets scattered rain and in many places the crop looks better today than it did yesterday. Parts of the Black Sea have received good rains which help what is there of the winter wheat and most definitely helps the spring crops. Keep hearing of a small area in ND/MN where the spring wheat is short, heading out and the heads are small-but this area is small and too bad if you are in that area, as other areas look fabulous. Farmer selling some spring wheat. Export sales were poor, and we saw cancellation or rolling forward into the new crop year. May 31 stocks estimates could be interesting after seeing 20% of HRW harvest in the past marketing year. Overall demand remains poor and mills have their pick of HRW or DNS for protein.

Christopher Steinhoff
Market Analyst
800-328-6530
651-355-6558
651-355-3723 fax

www.countryhedging.com