Can Tight Supplies Drive Price Potential?
Aug 01, 2013
Good Morning! Paul Georgy with early morning comments for August 1, 2013 at 5:15 am. Grain futures are steady to lower. Corn futures are starting lower as weather conditions weigh on market sentiment. Weather continues to be spun as bearish with cool temps hanging around and several systems to move across the cornbelt by the weekend. There are still some dry areas but the cooler temps are helping them hang on until some rain arrives. Because of the weather change, many analysts are raising the yield forecasts for corn and soybeans. Some are already trying to talk up an early frost. We are probably about 2 weeks away from traders having confidence in a long-term forecast.
Old crop supply and demand is a unique situation. Processors and ethanol plants in IA raised cash bids as much as 45 cents per bushel and NE climbed 35 cents for corn in the past few days. However, bids remain well below last week’s highs. Some soybean processors are shutting down for seasonal maintenance and have dropped bean basis by as much as 50 cents. With the positive profit margins, ethanol production for the week ending July 26 was 832 thousand barrels per day. This is a decline of 2.46% from last week and up 2.84% from last year. The improvement in corn basis has not enticed much farmer selling of corn this week. Many will be waiting to see how the USDA handles the ending stocks on the August 12 report.
Weekly export sales data will be released at 7:30 this morning. Trade estimates are for:
Corn -50,000-180,000 450,000-700,000
Soybeans -100,000-125,000 500,000-700,000
Soymeal 50,000-150,000 75,000-200,000
Soyoil zero-30,000 zero
Wheat ************ 500,000-700,000
Overall commodity markets received a boost overnight from the better than expected Chinese PMI of 50.3 when trade was expecting 49.9. At 7:30 this morning we should be getting comments from the European Central Bank. Tomorrow the unemployment data will be released.
The cattle market is caught in a trading range with October futures trading between 125 and 127. Cash markets are waiting for the packer or feedlot to give in. There have been a few bids showing up at 117 with feedlots asking 121 to 123. Boxed beef ended the month on a weak note. Choice was down .46 and select was down .01. The CME Feeder Index was up .21 to 148.52. Pork cutout values were down .08 on Wednesday. Cash hogs are providing support to futures due to the August contract’s discount. Allendale representatives will be happy to answer any questions you may have about the markets, visit or call one of our offices in your area.
Markets as of 5:15 AM
- Dec #Corn -3 1/2
- Nov #Beans + 1/4
- Sep #Wheat + 1/2
- Aug #Cattle -.07
- Aug #Hogs +.17
- Sep Dlr +.59
- Sep S&P +12.50
- Sep Crude +1.14
- Aug Gold +10.80
View Today’s Chart of the Day
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