Grain Downtrend Hard To Break
Jul 23, 2014
Good Morning! Paul Georgy with early morning comments for July 23, 2014 at 5:30 am CDT.
Grain futures are steady to higher as bottom pickers are on the sidelines.
With the trend down in corn, soybeans and wheat the path of least resistance is lower. Markets are oversold and trade is looking for and expects a short covering rally. However without a dramatic shift in weather it is difficult for bulls to gather any momentum.
8:00 AM Update - Morning Coffee Commentary:
Thanks to all who attended the weather portion of the Ag Leaders "Summer Update". Those who were unable to attend you can access the recorded session at your convenience.
Traders and analysts are trying to get a handle on just how big the corn crop could be. Rich Nelson will be discussing this issue in detail during today’s session of the Allendale’s Ag Leaders Conference starting at 2:00 pm. Get access here.
August grain options expire on Friday July, 25.
The annual Wheat Quality Council hard red spring wheat tour started yesterday in Fargo, North Dakota. For three days scouts will sample fields across North Dakota, far western Minnesota and far northern South Dakota and the tour will wrap up in Fargo Thursday afternoon.
Doane’s crop tour of corn and soybeans suggests corn yield checks averaged 193 in western IL and topped 200 in southeast IA. They said these were the highest yields ever record during their field checks in that area.
From USDA’s Ukraine attaché: As of July 14, 2014, of the main agricultural crops grown in Ukraine, about 7.6 million metric tons (MMT) of wheat was harvested, a little over 4.3 MMT of barley, 13,000 MT of rye, as well as almost 0.9 MMT of rapeseed. At the same time corn, sunflower and soybeans were developing well and receiving plenty of moisture from regular rains.
Transportation cost for grain to the gulf is higher. Old crop soybean basis is firm on lack of farmer selling. Corn basis is steady.
EIA report this morning is expected to show further drawdown in crude oil inventory. US production of oil is at 27 year high.
Cattle on Feed report will be released on Friday afternoon. Trade estimates are for On-Feed to come in at 98%, Placed at 96% and Marketed at 98%.
Fed cattle auction markets are firmer this week which leads to expectation of higher direct trade by end of week. Beef values are strong Tuesday afternoon with choice up 2.28 and select up 1.71. The CME Feeder Index is 210.48.
Lean hog futures reversed yesterday after breaking some key technical levels. The August contract sharp discount to cash index should provide support on setbacks. Pork cutout values are lower was down 1.15.
Markets as of 5:30 AM CDT
- Sep Corn + 3/4
- Aug Beans +2 1/4
- Sep Wheat +0
- Aug Cattle +.22
- Aug Hogs -.90
- Sep Dlr -.03
- Sep S&P +3.75
- Sep Crude +.02
- Aug Gold +2.30
Chart of the Day
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