Can A New Month Change The Bearish Attitude?
Aug 01, 2014
Good Morning! Paul Georgy with the early morning commentary for August 1, 2014 at 5:30 am CDT.
Grain futures are mixed with corn and soybeans lower and wheat higher. Index futures are showing a lower start for stocks this morning.
Update - Morning Coffee Commentary:
Corn closed out July with a 15% decline and the third straight monthly lower close. Traders are becoming convinced that USDA will raise yields on the August 12 report. Our study suggests the USDA will not give us the highest national yield until January.
Weather forecasts still remain the focus of row crop traders because a rain next week could be a "million dollar rain" for producers. One more good rain could be all the crop needs to make it to maturity.
In conversations with producers and elevators we are hearing a lot of corn moving off the farm on basis contracts or DP. Elevator managers are concerned about readying their facility for the bumper harvest. They would like to clean out their facilities before harvest.
Rail freight rates are high if you can get the railcars. Storage issues could make this year’s harvest a struggle for the producer.
The U.S. Environmental Agency on Thursday extended the deadline for refiners to show compliance with 2013 federal biofuel use targets under the Renewable Fuel Standard. Final targets for 2014 biofuel usage are expected to be sent to the White House within weeks, at which point the long-delayed rule will enter its final review before public release. Then the proposal will go to the White House's Office of Management and Budget which could take several weeks for a decision.
The U.S. Department of Agriculture said on Thursday it will modernize its decades-old inspection methods for poultry in an attempt to crack down on food-borne illness. They will require all poultry companies to take measures to prevent Salmonella and Campylobacter contamination.
Cattle futures were hit with the "Get Me Out NOW!" attitude on Thursday prompted by investor selling in the stock market and other commodities. Traders are waiting for the cash trade to develop this week. Lower futures are giving packers the incentive to reduce bids.
Feeders as the leaders will be watched closely because of the key reversal yesterday on the charts. They were limit down close after setting a new all-time high.
Beef values were mixed with choice up .74 and select down .23. The CME Feeder Index is 225.06. Call your Allendale Broker for strategies available in the cattle complex.
Lean hog futures tried rallying yesterday on oversold conditions and cattle/hog spread unwinding. However, Oct lean hog contract has closed lower 11 out of the last 12 trading session. Pork cutout values are down 1.20. Look for volatile markets to continue in livestock futures.
Markets as of 5:30 AM CDT
- Dec Corn -1
- Nov Beans -8 3/4
- Sep Wheat +3 1/2
- Oct Cattle -1.35
- Oct Hogs -.40
- Sep Dlr +.02
- Sep S&P -13.50
- Sep Crude -.79
- Oct Gold -3.30
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