Crop Deterioration Leads Weather Market
Jun 20, 2012
Good Morning! Paul Georgy with early morning comments for June 20, 2012 at 5:10 am. Corn and soybean futures are mixed as some profit taking is seen in corn after a sharp 2 day rally. We are in the midst of the 2012 weather market for Midwest crops. The weather forecasts are limiting the amount of rain for the eastern cornbelt for the next 10 days. Traders are convinced now they will only believe it can rain when they see it raining. World Weather Inc. says, "… The bottom line remains one of concern over below-average soil moisture and precipitation occurring in much of the Midwest during the coming week to ten days, but of special interest remains in the lower parts of the region where rainfall is not expected to be great enough to fix long term moisture deficits or induce much improvement for those crops suffering the most from dryness. There will be sufficient rainfall to slow drying rates and help reduce some of the crop stress, but greater rain will still be needed. The cool off that occurs in the eastern United States late this weekend and early next week helps to set the stage for rain later next week because of the warm, moist air that is expected to overrun the cooler and drier air that will be present this weekend …" The G20 Leaders meeting is over and they agreed to commit about $456 billion to the International Monetary Fund. We are hearing more slowdowns or closings of ethanol plants in the western cornbelt due to poor margins and problems procuring corn. Traders are already expecting a further decline in crop conditions next week. July option expiration is this Friday and the USDA report is next Friday morning. First notice day on July futures at the CME is also next Friday, June 29. (Reuters) Funds bought 20,000 corn contracts, 12,000 beans and 4,000 wheat on Tuesday. Cash cattle bids are 114 to 116 with offers at 120. Boxed beef was higher on Tuesday with choice up .45 and select up.43. Pork cutout was up 3.08. Tight cash hog supplies are supporting futures although very overbought. 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 +1 3/4
Jly Beans +11 1/4
Jly Wheat + 1/4
Aug Cattle +.32
Jly Hogs -.12
Sep S&P -.50
Sep Dlr -.05
Jly Crude -.18
Aug Gold -9.20
Allendale Advanced Charts
Yesterday’s impressive day of strength has now put the $14.00 level that has capped this market in the crosshairs. If we see a close above the $14.00 it would be irresponsible to imply any level that this market may find resistance. If we do see a correction from this level the 6/14/12 pivot low of $13.02 ¼ must hold in order to keep the bull market intact.
Get technical analysis for corn, beans, wheat, cattle, hogs, crude and dollar markets.
Nelson Notes from the desk of Rich Nelson
The extended forecast has sharply changed. The entire Cornbelt is forecast for above normal temps and below normal precip. The worst areas will be Indiana, Ohio, and much of Illinois.
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