Fifth Straight Week of Higher Opening for Corn
Jul 16, 2012
Good Morning! Paul Georgy with early morning comments for July 16, 2012 at 5:15 am. Corn and soybean futures are sharply higher and appear to be headed to the next handle. Heat moving back into the Midwest the next few days is firing up the bullish emotion and the deteriorating crop potential. World Weather Inc. comments, "… The greatest coverage and amounts of rain expected in the next ten days may occur Tuesday into Thursday of this week. However, most of the rainfall will continue a little too light to counter evaporation with daily highs varying in the middle 80s through the middle 90s and even warmer near and to the west of the Missouri River. It will be very difficult for very many locations to experience a net boost in soil moisture for more than a quick day or possibly two. Most of the rain will be lost to evaporation within a few hours of its fall suggesting crop stress will prevail in many areas. However, coverage will be 65% in the western Corn Belt Tuesday into Thursday of this week and near 80% in areas to the west of the Mississippi River…" Crop condition update to be released this afternoon will likely show the G/E falling sharply again this week. The chart watchers are now jumping on the long side as last week’s reversal was negated. November soybeans have now made new highs for 7 weeks in a row. December corn has now opened sharply higher for the 5 week in a row. The rally in price of grain is having an effect on demand but how much is the question analysts are struggling with. However we expect grains to be well supported until crop loss stabilizes. Livestock futures are under selling pressures due to high feed cost. Boxed beef was lower on Friday. Choice was down 2.09 and select was down .85. Pork cutout value was stable as it was down only .02. Subscribe today to the Allendale Research Center
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Markets as of 5:15 AM
Dec Corn +28 1/2
Nov Beans +35 3/4
Sep Wheat +25 1/4
Aug Cattle Stdy-Lwr
Aug Hogs Stdy-Lwr
Sep S&P -4.00
Sep Dlr +.21
Aug Crude -.37
Aug Gold -8.10
Allendale Advanced Charts
In Friday’s trade, we took out the Contract high at $7.48 buy one cent at $7.49. In the short term, as long as we don’t fill the gap between $6.75 and $6.85 higher trade is expected. For producers we feel that these are still fantastic levels to price unprotected bushels.
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Nelson Notes from the desk of Rich Nelson
The drought has made it all facets of the general media. CNBC began daily coverage five days ago. This morning it is now a headline on the front page of both google.com and yahoo.com. Old trading psychology suggests a rally is nearing an end when the general public hears about it.
There is a significant risk of loss when trading futures and options contracts. This information is not to be construed as an offer to sell or a solicitation or an offer to buy the commodities herein named, and each investor should consider the appropriateness of trading on this information, based on their objectives. The factual information of this report has been obtained from sources believed to be reliable, but is not necessarily all-inclusive and is not guaranteed as to accuracy. Past performance is not indicative of future results.