Mixed Trade after Friendly USDA Numbers on Friday
Oct 01, 2012
Good Morning! Steve Georgy with early morning comments for October 1, 2012 at 5:10 am. Corn is finding some follow through buying this morning with beans and wheat giving back some of the gains. Corn had a very strong close on Friday and gave the bulls some food until the Supply and Demand numbers come out on October 11th. Beans and wheat on the other hand are pulling back due to South America’s planting potential this week and the rains in Australia. South America will see a strong week for planting and as the weather maps stand now they should see rains follow right behind. This is much better conditions than what was projected over the last few weeks. Australia received some rain in their much needed areas and will most likely prevent a disaster for their wheat crop. This afternoon we will get a report on harvest pace. We should see more than 50% harvested in beans and maybe closer to 2/3 complete for corn by the end of the week. The weather should allow for farmers to continue at the good clip. We should continue to see rallies at this point limited due to continued harvest pressure. Corn still needs to find demand and with the big jump in price, it could be hard at these levels. On the other hand, corn should find good support on breaks with end users buying dips now that harvest is more than half over and we typically see the cash market strengthen. We continue to hear good bean yields and could see USDA revise their yield number higher late next week. This may continue to put pressure on beans as this report gets closer. Corn may be a different story. We have been hearing mixed yields and could keep traders focusing on the bullish quarterly stock numbers put out last Friday. Volume and volatility may slow down this week with China off for a holiday break. Traders are also talking about "new month, new money". Are we going to see new fund money allocated to the grains this week, helping to support prices? The dollar is lower this morning but could keep traders looking at the big picture as concern for the global economy continues to grow. This could be a factor that needs to be watched closely this week.
Markets as of 5:10 AM
Dec Corn +2 3/4
Nov Beans -15
Dec Wheat -11 1/4
Dec Dlr -.17
Sep S+P +5.25
Nov Crude -.25
Dec Gold -.60
Allendale Advanced Charts
Fridays impressive rally in Dec Corn has established the $7.11 low as the end to this leg of the seasonal decline. Due to the markets recovery I still feel that unless we see a break of the 8/21 $8.40 high this market is only in an initial correction in a larger bear market decline…Frank La Placa
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Nelson Notes from the desk of Rich Nelson
The quarterly Grain Stocks report found there was 988 million bushels of old crop corn around as of September 1. USDA had previously estimated 1.181 billion in old crop stocks earlier this estimate. Today’s number is THE survey estimate. Today’s number is even clearly lower than the average guess of 1.113 billion.
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