Tug-of-War Continues between Macros and Weather
Jun 22, 2012
Good Morning! Paul Georgy with early morning comments for June 22, 2012 at 5:10 am. Corn and soybean futures are higher with clear skies across cornbelt. As we enter the last few hours of trading for this week, traders are dealing with many forces. The selloff yesterday was led by macro influences such as a slowdown is China’s economy and more Euro problems. Weather was not supportive as a cluster of clouds and rain was moving through IL into IN. However the long-term forecasting models have reduced the moisture for the next 10 days. We are in a weather market where slight changes in forecast or clouds showing up on radar will swing trader’s confidence. In reality, the dry areas of southern IL and IN will have sizeable yield loss if it is 10 days before they receive rain. Can the northwestern cornbelt compensate for these losses in ECB? How will the USDA adjust corn acres on next Friday’s planted acreage report? The July grain options expire today. Argentina truckers have gone on strike for 3 days as winter arrives. Soymeal continues to provide support to the soy complex as demand for the protein increases due to ethanol plant closures and less DDG production. US soybeans are competitive in the world markets however US corn is higher priced than South America. Senate passes the farm bill which now goes to the House for debate. Boxed beef values were lower with choice down .77 and select down .23. Cash markets are still at a standstill. USDA Monthly Cattle on Feed report will be released this afternoon. Trade estimates are On Feed 100.6, Placed 113 and Marketed 104.9. The placement could be a surprise as poor pasture conditions sent cattle to feedlot. Pork demand is excellent as cutout values were up 1.44 on Thursday. Lean Hog futures are indicating overbought condition which suggests some profit taking could occur at any time. Don’t miss the Allendale Ag Leaders Webinar
scheduled for June 26. Get all the details at www.Allendale-inc.com
Markets as of 5:10 AM
Jly Corn +11
Jly Beans +14 1/2
Jly Wheat +11 3/4
Aug Cattle -.07
Jly Hogs -.30
Sep S&P +5.25
Sep Dlr +.04
Jly Crude +.45
Aug Gold +4.0
Allendale Advanced Charts
Yesterday’s break of the consolidation range in the Aug Crude Oil has set the stage for what could be a new leg lower in the bear trend. However, due to the impulsiveness and location of today’s price action on the chart, a blow off bottom maybe occurring?
Get technical analysis for corn, beans, wheat, cattle, hogs, crude and dollar markets.
Nelson Notes from the desk of Rich Nelson
The government’s weather agency updates long term forecasts once per month. The new July forecast calls for above normal temps in IA, IL, NE, MO, and SD and below normal precip for IA, IL, IN, MO, and E NE. The July/August/September forecast calls for above normal temps for the Cornbelt and also normal precip. This morning’s monthly update would suggest further yield declines.
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.