Watch the Dollar Index And Headlines
Aug 20, 2014
Good Morning! Paul Georgy with the early morning commentary for at 5:30 am.
Grain futures are mixed with corn and soybeans lower wheat higher.
Traders Focus Today: More tour information and technical support and resistance. Old crop tight supplies in soybeans will be watched closely.
Allendale 25th Annual Yield Surveyis underway. We will be taking producer information through August 29th and will release the finds on September 3rd.
Weather forecasts are beneficial to final stages of crop development. No warning’s of frost in long range forecasts.
Update - Morning Coffee Commentary:
Midwest crop tour projects the Nebraska corn yield at 163.77 nearly 20 bushels above 3 year average. Soybean pods are less than a year ago and the 3 year average in Nebraska.
Indiana corn crop is a record yield at 185.03 which is approximately 17 bushel above last year and 44 bushel above the 3 year average. Soybean pod counts are greater than last year.
Traders have been following social media and continue to tally the list of problems and diseases the tour is finding intraday. Some attribute any rallies in row crops to algo traders keying on the friendly spin from this chatter.
Gulf corn and SRW wheat basis offers are steady but Texas Gulf hard red wheat basis slipped again due to quiet export interest. Soybean basis is steady firm due to tight supplies at the gulf.
Midwest soybean and corn basis is higher for immediate delivery due to tight supplies of old crop beans and lack of farmer selling in corn.
Grain buyers are reporting high levels of vomitoxin found in freshly harvested wheat in North Dakota and northward into Canada.
Wheat futures are finding support on news that the Ukrainian wheat millers are asking the government to slow or halt milling wheat exports until they know how much quality wheat they have as harvest continues. Bread prices are up in Ukraine as milling wheat is quickly moving to the export market as farmers sell their production on fears that interest rates may be rising quickly.
Economic calendar for today: the EIA will release ethanol data and the July 29-30 FOMC minutes will be released.
The technical breakout in the September Dollar Index is worth watching. A strong dollar will increase export values of US grains and livestock against world competitors.
The hog futures are very sensitive to what is happening with the dollar. Pressure in futures is coming from liquidation of longs amid week cash values. Pork cutout values are down 1.36. The October futures contract is still about $20 under the cash index which a normal comparison would be around $12.
Consumer demand for primal cutouts of beef has been stifled. I went to the grocery store meat counter over the weekend and watched what consumers were picking up. They would pick up and look at the beef steaks and then lay it down and take chicken home with them. This is certainly a reason why beef values are sliding going into the last big cookout weekend of the season. Beef cutout values are lower with choice down 2.19 and select down 2.66. The CME feeder Index is 220.11.
Markets as of 5:30 AM CDT
Dec Corn -1 3/4
Nov Beans -3
Sep Wheat + 1/2
Sep Dlr +.22
Sep S&P -2.25
Sep Crude +1.32
Oct Gold -3.40
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