August 8 Monday Morning Wake Up Call
Aug 08, 2011
Every Monday morning, Pro Farmer editors record the "Monday Morning Wake Up Call." It's a recorded message available by clicking here.
But... if you'd rather read the report instead of listening, each Monday morning I'll update the copy from the call here to help set your agenda of key issues that will be impacting the grain and livestock markets in the week ahead.
Monday Morning Wake Up Call
Good morning ... this is your August 8th edition of the Pro Farmer Monday Morning Wake Up Call.
It’s battle time in the grain markets.
On one hand, the ag markets will be forced – along with all the other U.S. markets – to factor in the downgrading of U.S. debt by the credit rating agency Standard & Poor’s. As U.S. Treasury Secretary Timothy Giethner pointed out, S&P does not have the best track record when it comes to credit rating, but S&P has more often than not erred on the other side and has been too generous with its ratings. There is no doubt the S&P U.S. credit downgrade weighed on grain prices overnight and prices will likely be under pressure again today.
Also on the bearish side of the grain markets today is a non-threatening forecast for the Midwest. After a string of days, that turned into weeks, that were too hot and too dry, a string of cooler and wetter days will at least stop yield deterioration for now. Conditions look favorable in the Midwest at least through mid-month.
But... on the bullish side of the market, grain traders are trying to figure out exactly what they should do with talk of terrible yield potential in some Illinois cornfields. Traders know damage has been done to corn yields, but now the question they are trying to answer is just how much yield has been lost.
The battle between poor economic conditions (coupled with exceptionally low consumer confidence) and talk of damaged corn yield potential will create another week of very choppy price action in grain futures.
It’s a busy week in Washington. This afternoon, the Weekly Crop Progress and Condition Reports will be released and traders are looking for generally steady crop conditions. Tuesday, the Federal Open Market Committee meeting will take center stage with financial markets looking for any change in attitude at the Federal Reserve after the credit downgrade. And Thursday, USDA will release its first survey-based corn and soybean crop estimates as well as update the Supply & Demand outlooks for the old- and new-crop marketing years.
Gold is trading about $50 – yes, $50! – higher this morning, but the dollar has recovered from early sharp losses to trade sharply higher. Crude oil futures are trading sharply lower in early trade. Overnight, corn was mostly 13 to 14 cents lower with soybeans 16 to 20 cents lower and wheat mostly 18 to 20 cents lower. Those are your opening grain calls.
That’s your Pro Farmer Monday Morning Wake Up Call.