Grains Higher Overnight, Soybeans Test Highs
Apr 27, 2012
· Grains sharply higher overnight; Another chart reversal pattern failed to see follow-thru, as nearby contracts trade within a few cents of the highs; July corn bouncing off $6 yesterday
· Rains slated for some of the Corn Belt through Saturday; Producers in Iowa and other places that have seen minor delays may be halted for a couple of days
· Argentina corn harvest 41.3% complete, soy harvest 56.1% complete according to Buenos Aires Grain Exchange data; Exchange cut Argentina soy output number to 43.0mmt from 44.0mmt
· IGC cuts South American soybean production to 115.9mmt, down from prior 119.5mmt
· USDA released details on this week’s finding of Mad Cow disease in a California dairy cow, details in article below
· Senate Ag Committee approved a proposed five-year farm bill that seeks to make steep cuts to subsidies while expanding government crop insurance programs
· Outside markets mixed with crude lower, equities higher and currencies mostly flat
The soy complex should be able to hold the grain markets together today, although we’re going to maintain a downside technical bias in corn until the July contract can trade convincingly over Monday’s highs at 6.21 ¾. Wheat futures continue to feel pressure from a big fund short and ample world supplies. Wheat is a weight on the corn market in many respects. December corn continues weakness on bull spreading yesterday; Favorable weather conditions have many analysts estimating a high ’12 yield estimate from the USDA on May 10th. Many analysts believe the number will north of 165bpa.
Weather will be the most important factor from here on out. Any drought/heat threat will likely be accompanied by significant speculative buying in corn and soybeans. An event such as this will likely provide producers with their best opportunity for new sales.
As always, call the office with questions or concerns.