Last Week’s Lows Key Support For Grains
Aug 15, 2012
Good Morning! Paul Georgy with early morning comments for August 15, 2012 at 5:10 am. Grain futures are higher this morning as technical buying develops near last week’s lows. Rain should fall over the cornbelt with 70% coverage on the next 10 days. The Australian government announced that they now believe El Nino has arrived. Japan made the official announcement that it started last Friday. This could be why we are seeing moisture show up in the Midwest. Cash grain markets were weaker at the gulf but interior basis was higher for both corn and soybeans. Harvest in the delta is filling the demand for the slow export market at the gulf. Farmer selling has come to a standstill in the Midwest due to lower futures prices. Technical traders are keying in on last week’s low as critical support. A close below that level could open the door for more selling. News is limited as traders transition from the focus on supply side concerns to demand losses. Boxed beef prices have been on a steady climb. On Tuesday choice was up 2.32 and select was up 2.42. Demand from exports, Labor Day buying and government purchases are all helping support beef product. A close above the May 18th high is the next hurdle for Oct futures. Pork cutout values were .67 higher on Tuesday being supported by strong beef prices in recent weeks. October Lean Hog Futures will likely run into resistance near 78.00. Allendale is preparing for the Annual Yield Survey which will begin next week. Your participation in years past has been very helpful in getting an accurate reading on the corn yield going into the September USDA Report. The Allendale Team is also getting ready for the August Ag Leaders Webinar which will held on August 28; sign up today.
Markets as of 5:10 AM
Dec Corn +4 1/2
Nov Beans +15 3/4
Sep Wheat +6 3/4
Aug Cattle +.77
Oct Hogs +.15
Sep S&P -2.75
Sep Dlr +.20
Sep Crude -.30
Aug Gold -3.40
Allendale Advanced Charts
Yesterday’s trade in Nov Soybeans found balance between buyers and sellers at lower levels. I feel that we should continue to see a consolidative trade until we see a confirmed break out of the triangle pattern that is shown in the chart below. Until we do see this breakout I feel that the whipsaw risk is too high to take a directional stance in the Soybeans…Frank La Placa
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Nelson Notes from the desk of Rich Nelson
The NOPA soybean crush report was very respectable. 137.380 million bushels of soybeans were crushed last month. That is a full 12% over last year and beat the 132.5 million bushel estimate. August is left and is the last month of the marketing year. If August runs just 10% higher than last year, which is reasonable, total year crush will end 1.702 billion. That beats USDA's 1.690 expectation. This is actually a big deal. If we beat USDA hopes by 12 million, that brings ending stocks (115 million new crop) down quite a bit closer to the important 100 mark.
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