Grains Finding Pressure as USDA Report Draws Near
Sep 28, 2012
Good Morning! Steve Georgy with early morning comments for September 28, 2012 at 5:10 am. Grain Markets continue to edge lower as we approach the Quarterly Stock report at 7:30. This week has once again played out to be a fairly negative week for the grains. As of the close yesterday, corn has fallen 32 cents, beans are down 51 cents and wheat has pulled back 41 cents so far this week. The main focus is the report out in a few hours. The average trade guess for corn is 1.126 billion carryout. This is a big number and could see further downside if this gets any bigger. The charts still look weak as corn continues to make new recent lows. Next support levels are 7.00 and 6.80. Beans are expected to have a carryout number of 132 million. Soybeans are more influenced right now with a potentially bigger crop than expected due to late rains this summer and better than expected harvest. The focus in beans is not the Quarterly Stock report as much but the potential big change on the supply and demand report in October. Wheat took out good support yesterday and managed to close below it. A second close below 8.60 could find more technical selling. The average trade guess for the report this morning is 2.281 billion carryout. Wheat had the biggest decline in price yesterday for the grains and could see more selling on more of a technical level now that the charts are starting to roll over. The funds have been sellers all week and we see no reason for that to change this morning unless we see USDA come out with bullish report numbers. Corn exports were very low yesterday but beans and wheat were neutral. The US is still too high priced to be competitive with other countries. Here are prices of corn from various ports in US dollars per metric tonnes: Ukraine $231, Brazil $251, Argentina $262, and US Gulf $312. We have seen demand destruction in corn due to the drought this year and soaring prices but it seems prices need to come down get competitive once again.
Markets as of 5:10 AM
Dec Corn -10 3/4
Nov Beans -6 3/4
Dec Wheat -3
Oct Cattle -.55
Oct Hogs -.10
Dec Dlr -.06
Sep S+P -1.00
Oct Crude +.45
Dec Gold +3.30
Allendale Advanced Charts
Yesterday Dec Lean Hogs has confirmed the 9/25 high of $75.87 ½ as the new pivot high that must be closed above to resume the base and recovery. This market is still clearly in a downtrend and a retest of the double bottom at $70.00 is not out of the question…Frank La Placa
Get technical analysis for corn, beans, wheat, cattle, hogs, crude and dollar markets.
Nelson Notes from the desk of Rich Nelson
Often it is important to step back and view grain markets from an outside investor’s view. In that respect the recent commodity liquidation is actually mild at only 5.9%. December corn and November soybeans lead the way with a 15.2% and 12.9% decline off summer highs respectively.
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