Market Rally An Opportunity To Make Sales?
Aug 16, 2013
Good Morning! Paul Georgy with early morning comments for August 16, 2013 at 5:00 am. Grain futures are lower after a sharp rally in soybeans. After hitting technical resistance targets yesterday, traders are taking some profits ahead of the weekend.
Weather, exports, FSA data, technical buy stops and bears covering some of their holdings hit the markets all at one time on Thursday. Can those factors influence market attitude as balance sheets for corn are still burdensome? The soybean market has rallied $1.00 from the lows made on August 8 through yesterday. Corn is up nearly 30 cents from Tuesday’s low while wheat is up 17 cents from the lows made on Wednesday.
The weather forecast has less rain and warmer temps moving into the Midwest for the next week. It is likely to provide some stress on the growing crop. The greater concern is the chart put out by Accuweather which had an early frost on it. All traders are very sensitive to how the frost word is used this year. Brazil may be looking for more US wheat as a frost/freeze has impacted their wheat producing region.
NOPA crush was 116.3 million bushels which was less than trade estimate of 119. The crush for July was in line with what is needed to meet USDA balance sheet target. Soybean basis is down while corn basis is firmer at Midwest processors.
Rich Nelson, Allendale’s Chief Strategist, reminds us to not take the FSA data at face value. Just because FSA believes on their first draft that 3.4 million should come off their planted acreage number does not mean the USDA will do the same with their own planted acreage. The FSA reduced 2 million acres in 2010 on their first estimate and in the end the USDA number dropped only 300,000 acres. In 2011, FSA estimated 3 million and USDA lowered its corn acreage by 400,000 from July to January.
Cash cattle trade is at a stand-off. Boxed beef was higher on Thursday with choice up .95 and select up 1.01. Due to the strength in futures and product, traders are expecting cash to be higher than last week. Pork values were down .43. Retailers maybe doing some fill-in buying early next week which could provide more support to products. CME Feeder Index is at 152.28 up .27.
Allendale’s Annual Yield Survey starts on Monday August 19th and runs through August 30th.
Markets as of 5:00 AM
- Dec Corn -5 3/4
- Nov Beans -7 1/4
- Sep Wheat -1 3/4
- Oct Cattle +.40
- Oct Hogs +.32
- Sep Dlr +.05
- Sep S&P +2.25
- Sep Crude +.40
- Oct Gold +4.80
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