Bulls Try To Stand Their Ground
Sep 18, 2013
Good Morning! Paul Georgy with early morning comments for September 18, 2013 at 5:00 am. Grain futures test support and are trading near session highs.
The FSA numbers were initially considered friendly but after more analysis trade realized that the data was inconclusive. We now have to look for some positive news to feed the bulls. Weather forecasts have more rain for the central cornbelt over the next few days although it may be too late to do a lot of good for soybeans. The forecast is without any frost threats at least for the next 2 weeks.
Harvest continues to move North with reports from a producer in Boone, IA getting 210 bushels and 54# test weight from a field of corn. This was a surprise due to the lack of rainfall. Producers were rushing to harvest corn as quick delivery bids carried a considerable premium. As this premium disappeared early this week producers quickly started to fill their own bins. Late yesterday we saw processor bids rise as corn and soybeans stopped coming to market. This kind of activity is likely to occur until farmer owned storage is full.
Brazilian soybean crushers are struggling to procure enough beans to keep plants operating. This is after Brazil has recorded a record harvest of 81.5 mmt. A reason farmers are holding on to soybeans is because of the wild inflation in that country. It is better to hold hard assets than cash.
The US House of Representatives vote on cutting the food stamp funding by $40 billion will likely come down to a close vote as some Republicans are not in favor of the cuts.
The chart gap of ½ cent in November beans is still support at 13.31 ½. Dec corn took out support and closed at the lowest levels in over a month. The next support level in Dec corn is 4.45 ¾. The Dec Wheat is still holding support but remains a follower of corn.
Traders continue to show discouragement with the cash cattle market. Feedlots are posting an asking price of $125. The current battle is between adequate supplies and slack demand. Beef cutout values were lower with choice down .01 and select down .67. The CME Feeder index is at 156.43 up .10.
Pork cutout values were up 1.90. Profit taking by longs in the nearby lean hog futures pushed prices to test uptrend support. Higher product values, technicals and tight market ready supplies are keeping futures in an uptrend. Sign up for the Allendale Ag Leaders Webinar which will be held next Tuesday evening.
Markets as of 5:00 AM
- Dec Corn +1 3/4
- Nov Beans + 1/2
- Sep Wheat +2 1/4
- Oct Cattle -.37
- Oct Hogs -.30
- Dec Dlr -.04
- Dec S&P -2.00
- Oct Crude -.77
- Oct Gold -6.90
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