Good Morning! Paul Georgy with early morning comments for November 8, 2012 at 5:00 am. Grains are quiet while holding follow through strength from yesterday. Weekly export sales will be released at 7:30. Trade estimates are: wheat 300 to 500 tmt, corn 150 to 250 tmt, soybeans 600 to 800 tmt, meal 100 to 150 tmt and soyoil 20 to 40 tmt. Cash corn prices in South America have risen sharply over the last few days. This maybe giving signals that corn supplies are getting tight there. Corn basis in the US interior was down 5 cents and soybeans slipped 2 cents late yesterday. The thought is, Central Illinois processors are railing corn in from the west in order to keep local basis in check. Funds bought 6,000 corn contracts and 5,000 wheat contracts yesterday. Traders are expecting less corn production on Friday’s report which could make supplies tighter when US exports become more competitive. Technical support in Dec corn is 7.32 1/2. This area has been tested several times which suggests sell stops could be building just below that level. Traders will be getting positioned to go through the report on Friday morning. Lean hog futures finished at a 4-month high in the Dec contract on fund and technical buying on Wednesday. Nearby futures had been carrying a steep discount to the lean hog index. Pork cutout values were up .67 late yesterday. Beef futures would like to rally with hogs but are running into some demand road blocks. Another storm is headed for the Northeastern US and packers have supplies of meat they need to move. The Dow weakness is also providing head winds for beef. Boxed beef was mixed yesterday with choice up .28 and select down .29. Sign up for the Allendale’s Ag Leaders Conference to be held on January 25 and 26, 2013.
Markets as of 5:00 AM
Dec Corn + 1/2
Jan Beans +1 1/4
Dec Wheat + 1/4
Dec Cattle -.12
Dec Hogs -.05
Dec Dlr +.16
Dec S+P +.75
Dec Crude +.75
Dec Gold +.80
Allendale Advanced Charts
Yesterday Dec Live Cattle tested the lower edge of the channel that it has been in over the last 6mos. A break below would project a move to $117. However until we see a confirmed break of the channel we should continue to view this break as just another retest of support…Frank La Placa
Get technical analysis for corn, beans, wheat, cattle, hogs, crude and dollar markets.
Nelson Notes from the desk of Rich Nelson
ANZ Banking Group suggests Eastern Australia will be out of its wheat for export by April. This may push local prices to a significant premium over the US. Their numbers are made assuming production of 10 million tonnes and domestic demand for 5. From this recently harvested crop that gives them about 1 million tonnes for monthly exports. They estimate this year’s production at 20 million tonnes, down from last year’s 29. USDA’s latest estimate is 23 mt.
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