Weather and Investor Positioning Key to Month End
May 29, 2012
Good Morning! Paul Georgy with early morning comments for May 29, 2012 at 5:10 am. Corn and soybean futures are mixed. Some areas of Midwest are still getting rain this morning. Returning to McHenry from Southern IL yesterday in the 90 degree plus heat, I saw corn and soybeans showing significant stress in some areas and outstanding looking crops in other areas. A rain is welcome (the sooner the better) throughout the state of IL. A little moisture and the cooler temps in the forecast will help considerably. Next chance for a rain with good coverage is Thursday into Friday. Weather models have not changed from last Friday. The crop conditions report this afternoon will be watched closely. Remember due to the holiday on Monday many of the weekly USDA reports will pushed back one day this week. Celeres out of Brazil says that the Brazilian farmer has sold 27% of the 2012-13 soybeans crop 4 months before the start of planting. In Greece, the conservative party has gained back leadership in the polls and that is supporting the Euro. Managed money in the Commitment of Traders report increased long positions in corn by 25,355, reduced bean longs by 15,781 and covered short wheat positions to the tune of 57,083. Leaving managed money funds with only 7,026 net short is certainly a reason for the rally in wheat last week. We will be watching for more adjusting of positions by funds as we approach month end. Friday meat values slipped with choice down .93 and select down 1.38. Pork cutout values were down .23. The packers have a short week and the meat clearance at the retail counter over the weekend will determine their attitude and aggressiveness in bids in the cash markets. Futures will be influenced by investor attitude and headlines out of Europe at 9:05 this morning. Stay in touch with Allendale on twitter or subscribe to Allendale Research Center. Listening to the Allendale "Morning Coffee"
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Markets as of 5:10 AM
Jly Corn +1 1/4
Jly Beans +10 1/4
Jly Wheat -9 1/4
Jun Cattle stdy-firm
Jun Hogs stdy-firm
Jun S&P +6.50
Jun Dlr -.17
Jun Crude +.35
June Gold +4.50
Here are just a few of the reports we follow and record historical data on:
Allendale Advanced Charts
Friday’s inside day continues to show the lack of conviction in the Dec. Corn. For the near term, the double top at $5.50 should cap the upside with a break of the 5/11 low of $4.99 low needed to start a new leg down. While we continue to advise producers to look to use rally’s in the Corn market to price corn we would advise to use options in order to minimize whipsaw risk.
Get technical analysis for corn, beans, wheat, cattle, hogs, crude and dollar markets.
Nelson Notes from the desk of Rich Nelson
The Commerce Ministry of China has increased its estimate of May soybean imports dramatically. The agency estimates 7.22 million tonnes, a new record, will be imported. Previously the group was only looking for 5.63. Some Chinese industry sources are skeptical about the new numbers.
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