Will Traders Cover Shorts Before Weekend?
Aug 09, 2013
Good Morning! Paul Georgy with early morning comments for August 9, 2013 at 5:00 am. Grain futures are mixed in a quiet overnight session. New news affecting grain markets is limited until we get to Monday’s USDA Crop Production Report.
Trade average estimates suggest they are expecting an increase in US corn production due to an improvement in yield. Allendale’s research suggests it is unlikely there will be any changes in planted acres but don’t be surprised to have an adjustment in harvested acres.
Soybean data adjustments are very possible on Monday’s report. The USDA did a re-survey in late July for planted acres. Soybean yields could be adjusted as well due to late planting and weather variance across the Midwest.
Cash grain markets are firm in the country for both corn and soybeans which is driving strength in the front month contracts at the CBOT. Farmers are taking a tough stand due to the recent market sell-off and not selling cash product. Most bins are already empty.
Export data showed China as a big buyer of soybeans. USDA confirmed more old crop sales of soybeans which continue to add to the problems for meeting the 2012/13 ending stocks balance sheet. Corn and wheat sales were in line with trade expectations however favorable weather continues to limit gains.
Tyson’s ban on buying cattle that have been fed Zilmax may not have as much of an impact on cattle production as first thought. Cattle feeders will find an alternative to Zilmax which will comply with their packer’s requirements. The Closing Cattle commentary in the Allendale Advisory Report has more discussion on the subject. Two closes above 127.00 in the October contract are needed to confirm a summer low has been made. Choice beef was down .35 and Select was up .38. The CME Feeder index was steady at 149.74. The pork rally continues in sympathy with the strength in cattle. Pork cutout values were down .64.
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Markets as of 5:00 AM
- Dec Corn -2
- Nov Beans +7 1/4
- Sep Wheat +2
- Oct Cattle -.10
- Oct Hogs -.42
- Sep Dlr -.12
- Sep S&P -5.50
- Sep Crude +1.18
- Oct Gold -.60
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