Cash Corn Stocks Tight Until New Crop Arrives
May 11, 2012
Good Morning! Paul Georgy with early morning comments for May 11, 2012 at 5.25 am. Corn and soybeans futures are lower. Now that the USDA data has been released, the traders will be analyzing and adjusting the numbers to what could be expected on the next report. Traders will be watching for export announcements at 8:00 this morning as nearby corn is trading below the important 6.00 area. We believe cash corn will still be king for several weeks as supplies will be tight until new crop corn can be harvested. Weather forecasts should give farmers a chance to finish up corn planting and get a considerable amount of beans planted. The outside markets are quiet as we end the week. Watch for new developments in Europe over the weekend. Don’t forget managed money has a record long position in soybeans. The CFTC will give us updated numbers this afternoon on the Commitment of Traders Report. Cash cattle trade was at a standstill on Thursday with very light interest. Boxed beef values were lower with choice down 1.59 and select down 2.09. Pork cutout values were up 1.96. A strong close for the week is necessary to give hope the seasonal lows are in. Stay in touch with Allendale Research at www.allendale-inc.com.
Markets as of 5:25AM
Jly Corn -4 3/4
Jly Beans -17 1/4
Jly Wheat -3
Jun Cattle -.62
Jun Hogs -.02
Jun S&P -6.50
Jun Dlr +.07
May Crude -.95
June Gold -13.00
Here are just a few of the reports we follow and record historical data on:
Allendale Advanced Charts
Thursday’s break below the 4/18/12 low of $5.91 ¾ opens up the July Corn market to a potential test of the 3/15/2011 low of $5.68 1/2. A close above the 5/08/12 high of $6.32 is needed to neutralize the down trend.
Get technical analysis for corn, beans, wheat, cattle, hogs, crude and dollar markets.
Nelson Notes from the desk of Rich Nelson
While the trade was expecting a decrease in old crop stocks, from 801 to 749 million bushels, USDA actually increased stocks to 851 (lowered feed and residual). The trade was expecting new crop ending stocks to jump to 1.714 billion. USDA surpassed that with a 1.881 billion estimate. Yield was adjusted to 166.0 as Allendale had discussed before due to strong early plantings. World corn stocks will jump from 127.56 million tonnes old crop to 152.34. That was much higher than expectations of 136.822.
There is a significant risk of loss when trading futures and options contracts. This information is not to be construed as an offer to sell or a solicitation or an offer to buy the commodities herein named, and each investor should consider the appropriateness of trading on this information, based on their objectives. The factual information of this report has been obtained from sources believed to be reliable, but is not necessarily all-inclusive and is not guaranteed as to accuracy. Past performance is not indicative of future results.