Grains in a Period of Changing Focus
Jul 27, 2012
Good Morning! Paul Georgy with early morning comments for July 27, 2012 at 5:15 am. Grain futures are higher as the tug-o-war of events and headlines changes trader’s minds. The EU got a shot of hopium yesterday when the president of the European Central Bank said he will do whatever it takes to preserve the Euro. This should have been supportive to grain markets but had very little effect. Various crop tours are crossing the Midwest looking at field plots and reporting what they see. Many plots suggested significantly lower yields for corn compared to trend and last year’s yield. Harvest is starting in central IL and south with test weights 51# to 54# and moisture 14% to 17%. Reuters survey of industry analysts on corn yield estimates provides almost a daily dose of decreasing production. But the old adage is "high prices cure high prices." The USDA weekly export sales certainly were a confirmation of what high prices can do. Last week’s total corn sales resulted in net cancellations of 140,000 tonnes. Ethanol production declined last week as well. However corn futures struggled with technical resistance at 8.00 in the December contract and a deteriorating yield. Rain in the forecast will likely be too late to help the corn crop but would halt the daily loss. As we close out the week of volatile trading, soybean traders will be keying in on the forecast for rain to cover 80 to 90 % of Midwest over the next 10 days. Those following chart patterns will be closely watching the reversal week down for November soybeans where a close below 15.68 would confirm the pattern. The CME raised margin requirements on spreads in grains by $200 for hedgers. Spring Wheat tour results show an 8.2% higher yield than last year. Call your Allendale Representative to discuss ways to protect current crop insurance payment potential. Cash cattle traded at 1.00 higher at 114.00. Boxed beef was mixed with choice up .16 and select down .11. Fund buying has been a support to lean hog futures. Pork cutout values were up .23. Now headed to the airport and looking forward to seeing many of you in Buffalo, ND this afternoon at the Summer Outlook Meeting for Melvin Grain, an Allendale Branch Office.
Markets as of 5:15 AM
Dec Corn +9 1/4
Nov Beans +25 1/4
Sep Wheat +14 3/4
Aug Cattle -.32
Aug Hogs +.42
Sep S&P +2.25
Sep Dlr +08
Sep Crude +.10
Aug Gold +6.60
Allendale Advanced Charts
Yesterday’s strong trade in Oct. Lean Hogs closed above the 7/19 pivot high of $81.22 ½ and the downtrend line that has capped this market for the past three weeks. While this market is still at risk to a sideways churn, I feel that we must approach this trade as a base and reversal that could set up for higher prices.
Get technical analysis for corn, beans, wheat, cattle, hogs, crude and dollar markets.
Nelson Notes from the desk of Rich Nelson
There is still one last system for much of the region lined up for early next week. The coverage area and amounts have yet to be confirmed by both models. Forecast rains may help all soybean areas but Nebraska and Missouri in the coming days.
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.