What Can Cause A Soybean Rally?
Jul 02, 2014
Good Morning! Paul Georgy with early morning comments for July 2, 2014 at 5:30 am CDT.
Grain futures are mixed with corn lower and soybeans and wheat higher.
Late yesterday, there was a flurry of buying in the soybean complex. Many think it was the beginning of the month and quarter buying. Funds are expected to still be carrying a long position in beans and meal. Liquidation could provide more selling if we don’t see a quick turnaround. The weekly export sales report is out tomorrow morning; expect prices to be supported in old crop soybeans ahead of this data.
Corn futures may be in for a short covering bounce ahead of the weekend but traders struggle with a good reason for a rally as weather is beneficial to production.
Ryan Martin, Allendale Inc.’s meteorologist believes the warm bias and struggle for heat to build in the Midwest during pollination is unlikely.
The majority of Midwest corn is expected to be pollinating between the 10th and 20th of July. The lack of heat should improve chance for a record yield.
Egypt's state grain buyer, the General Authority for Supply Commodities bought 240,000 tonnes of Romanian and Russian wheat for shipment Aug. 11.
China is expected to scrap its corn stockpiling by as early as next year as it battles to reduce mammoth state reserves that account for more than half of global stocks.
It was reported yesterday afternoon that the Mississippi River is closed at St Louis due to a towing vessel sinking with 10,000 gallons of diesel fuel aboard.
There were a few corn and soybean contracts delivered this morning. However there were 54 KC wheat and 51 contracts of Chicago wheat delivered against the July futures.
Economic reports out today: ADP employment expected to indicate continued decent growth in U.S. labor market and EIA report expected to show -2.4 million bbl. drop in crude oil inventories.
Cattle feeding margins exploded last week. Week ending June 28, margins hit $280 compared to previous week of $194 and a negative $162 a year ago. Beef values remain strong as retailers feature steaks for the July 4th Cookout. However the concern is whether or not demand post-holiday will be able to sustain the recent strength. Choice beef is up .85 and select is up .59. CME Feeder Index is 216.92. Livestock markets close early on Thursday and will reopen on Tuesday at 9:05.
Live hog futures continue to adjust prices after last week’s report. The deferred contracts are setting new contract highs due to breeding herd and farrowing estimates. Look for the discount of the Dec and Feb to narrow against nearby contracts. The pork cutout values are down 2.89.
Markets as of 5:30 AM CDT
- Jul Corn -1 3/4
- Jul Beans +7
- Jul Wheat + 3/4
- Aug Cattle +.60
- Jul Hogs +.02
- Sep Dlr +.03
- Sep S&P +1.00
- Aug Crude -.33
- Aug Gold +1.30
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