Dec Corn Hits $8.00 and Reverses
Jul 23, 2012
Good Morning! Paul Georgy with early morning comments for July 23, 2012 at 5:10 am. Futures are lower after opening at new historic highs in Dec corn and Nov soybeans. Weather forecasts have moved the high pressure ridge further west for the last half of this week which should make way for some moisture to cover 85% of Midwest. This is cooler and wetter than what was expected going home on Friday. This week, some big US crop tours take to the road. Cropcast weather service will be looking over the corn and soybean field as they tour the Midwest starting today. The US Wheat Quality Council will be checking the North Dakota wheat fields starting tomorrow. Cash basis remains strong in soybeans but some central cornbelt locations have lowered corn bids. Traders are estimating China needs more soybeans to finish out the year but are concerned about how they will act with record setting prices. The CFTC report on Friday put non-commercials with record long positions in wheat, when earlier this year they were record short wheat. Managed money continued to build long positions in corn and soybeans. The weekly crop conditions will be released this afternoon at 3:00 pm. Traders are expecting further deteriorating of corn and soybeans from the G/E category. USDA gave us the Cattle-on-Feed data last Friday which was considered to be neutral and in line with trade estimates. This week we have the bi-annual cattle inventory report on Friday at 2:00 pm. Following cow slaughter from the beginning of the year, we have seen herd expansion from Feb through May. However, in June, cow slaughter jumped compared to a year ago due to poor pasture conditions, weak feeder prices and high feed cost. Friday’s data could still show an increase in herd buildup because data is collected as of July 1. Boxed beef on Friday was lower, choice was down 1.27 and select down 1.02. Pork cutout was up .01. Check out the Allendale Research Center
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Markets as of 5:10 AM
Dec Corn -20 3/4
Nov Beans -37 1/2
Sep Wheat -26
Aug Cattle stdy-lwr
Aug Hogs stdy-lwr
Sep S&P -15.75
Sep Dlr +.26
Sep Crude -2.78
Aug Gold -11.50
Allendale Advanced Charts
Yesterday’s impressive rally in the Oct Live Cattle has left a potential triple bottom on the chart. However we cannot confirm any type of chart pattern unless we see a higher close tomorrow. We feel that the today’s rally taking out the last four days of price action is very positive going forward. Now all bullish decisions should be risked against the $119.50 low established on 4/27.
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Nelson Notes from the desk of Rich Nelson
In June, Chinese home prices stopped their eight month slide. Some suggest this is a sign China’s monetary easing is taking effect. China’s economic growth has been slowing in recent quarters.
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