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Midweek Markets: Crystal Ball Gazing

July 9, 2014
By: Ben Potter, AgWeb.com Social Media and Innovation Editor google + 
Midweek Markets
  

  Change is constant – and complex – in today’s commodity future’s markets. Grain market experts scour the globe looking for any insights to gain a competitive edge. Here is sample of what some of them have been saying this week.

This week, all crystal balls are tuned into Friday’s WASDE report. Bob Utterback with Utterback Marketing Services says many of the nation’s corn farmers are facing a good crop and hoping for a bounce into harvest or after the bins doors shut. But with the prospect of sub-$4 corn upon us, it’s time to take a close, hard look at breakevens, he says.

"Now is a time to reflect and decide where your bottom line is as to what price is break even for corn and how to enhance revenue if the cash price does not cover the input costs," he says. "The next few years, without an event to spark the prices higher, is going to be difficult at best when it comes to pricing your crop."

Kevin Van Trump with Farm Direction has been wondering if demand strength can overcome the "sea of soybeans" that could cause prices to sink.

"Yes, it’s still early for soybeans and we are a long ways from the end of August, but you can't ignore the current facts, which are record acreage and near ideal growing conditions," he says. "In return, the race is on to see who can project the highest average USDA yield. As of right now it seems the trade has bid up the yield estimate to a new record of 46 or perhaps even 46.5 bushels per acre!"

Dan Hueber with The Hueber Report takes a peek overseas to look for bullish news in wheat, but finds little in the way of "realistically fresh news."

"There remains concern over the monsoons in India but still potential over the next week or so for rain to move north," he says. "In Europe, not unlike the U.S., the other problem exists in that too much rain appears to be affecting the quality of the wheat but realistically that will just translate into more feed quality wheat."

Russia, meantime, is off to a slow start for harvest, but still expects to reap 94 to 99 million metric tons (MMT), up from 92.4 MMT last year, Hueber adds.

Paul Georgy with Allendale, Inc., says the new May beef trade numbers could best be described as "disappointing."

"Beef exports ran 4% over last year," he says. "While that is still a very good pace, it is a slower pace than the 5% and 15% increase posted in the previous two months."

Market Rally, a podcast featuring Pro Farmer’s Chip Flory, breaks down market highlights each afternoon when the markets close. Market Rally broadcasts to these affiliates, so you can listen live starting at 2:06 CST. Or, catch up anytime online at http://www.agweb.com/multimedia/market_rally/podcast.aspx.

The AgWeb discussion boards continue to be a farmer-led wealth of information. Ask questions, answer questions, offer opinions or just follow along.

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