Crop Stress Drives Prices Overnight
Sep 03, 2013
Good Morning! Paul Georgy with early morning comments for September 3, 2013 at 4:45 am. Grain futures are higher on lack of rain in in the forecast. Soybeans and corn are expected to drop 3 to 5% on the crop conditions report this afternoon. The President’s decision to let Congress make the decision on whether to move against Syria has given traders a reason for their risk-off attitude this morning toward other commodities and the move back to buying equities.
About 40% of the cornbelt received some rain over the weekend. Those areas not receiving moisture will have further crop stress this week. The next chance of rain is late this weekend but forecasters are not providing a lot of confidence in the coverage.
China’s PMI showed an improvement and above trade estimates. China’s Ag Minister said they will continue to increase imports of corn due to growing demand. This is on top of a bumper harvest domestically.
Egypt bought 355,000 tonnes of wheat over the weekend from the Black Sea Region.
Argentina is starting to experience dry conditions in its winter wheat region. They are a major exporter of wheat, most of which goes to its neighbor Brazil.
Brazil says they exported 3.0 mmt of corn in August compared to 733,300 tonnes in July. Soybean exports were 5.4 mmt in August compared to 5.66 mmt in July.
Technically November soybeans need a close above the 14.09 level to resume the uptrend. Dec corn trend changing point is 5.08 ½.
Cooler weather should get market hogs rate of gain back to normal after the week of extreme temps. Pork cutout values on Friday were down 2.07. Beef cutout values were slightly lower with choice down .04 and select down .54. The CME Feeder Index was up .56 to 155.32. Trade will be looking for a pickup in retail buying early this week as they restock coolers. Livestock markets should see a steady to higher opening.
Thanks to everyone who helped with the 24th Annual Allendale Yield Survey. We will be releasing the results on Wednesday morning at 7:30.
Markets as of 4:45 AM
- Dec Corn +7 1/2
- Nov Beans +45 1/4
- Dec Wheat +3 1/2
- Oct Cattle Steady-Higher
- Oct Hogs Steady-Higher
- Sep Dlr +.23
- Sep S&P +12.75
- Oct Crude -.46
- Oct Gold -2.90
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