Grains Dip on Profit-Taking as Forecast Changes
Jul 06, 2012
Good Morning! Paul Georgy with early morning comments for July 6, 2012 at 4:45 am. Corn and soybean futures are lower on profit taking and a little wetter forecast. Grain prices have rallied 30 to 38 percent in less than 3 weeks. World Weather Inc. says, "The bottom line remains one of serious concern over declining corn production potentials in the eastern and lower U.S. Midwest. Some rain will occur across the Midwest with the onset of cooler air this weekend into early next week, but the amount of rain that falls will stay lighter than that needed to induce a serious change in crop moisture and plant development. But any rain would be better than none. Greater rain frequency and intensity will impact the Midwest July 13-20, but it should not be a general soaking that would end drought. It will help to ease up on crop stress and provide a little better environment for "some" crops to reproduce in." Weekly export sales will be released at 7:30 this morning. The estimate for corn is 200 to 500 tmt, soybeans 400 to 650 tmt and wheat 300 to 450 tmt. The macro markets are adjusting from yesterday’s sharp move due to the interest rate cuts in China and ECB. The grain traders will likely be willing to take some profit today as hope of rain increases over weekend although crop damage is irreversible in many areas. Livestock producers are affected by the heat as weight gains fall and feed cost rise. Boxed beef values were mixed, choice up .35 and select was down 1.52. This could be an indication of cattle going to market early due to high feed cost. Pork cutout values continue to side as they were down another .92 on Thursday. Hope to see some post-holiday fill-in buyers to support product early next week. Traders will be looking ahead to Monday’s crop conditions report as we end the week. Check out YouTube "Morning Coffee" comments for more details.
Markets as of 4:45 AM
Jly Corn -17
Jly Beans -15 1/2
Jly Wheat -27 3/4
Aug Cattle +.12
Jly Hogs +.97
Sep S&P -2.75
Sep Dlr +.07
Aug Crude -1.44
Aug Gold -15.30
Allendale Advanced Charts
Dec. Wheat’s strong uptrend continued today with new highs. This market’s parabolic uptrend should correct at some point. A bullish mentality is advised until the $7.59 level is taken out.
Get technical analysis for corn, beans, wheat, cattle, hogs, crude and dollar markets.
Nelson Notes from the desk of Rich Nelson
Though temperatures will return to normal in the coming days the trade is primarily concerned with the developing drought. Expect yield losses to continue.
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.