Old-New Crop Spreads Take Spotlight Again
Aug 29, 2013
Good Morning! Paul Georgy with early morning comments for August 29, 2013 at 5:00 am. Grain futures are lower as commodity markets in general have a risk-off bias. The Dollar index is up sharply.
Weather maps and rain drop counting will be the concern of traders going into the weekend. The weather models are a little wetter with most of the light rain developing later this week. Many analysts are lowering their estimates for corn and soybean yields because of the persistent hot and dry conditions. Allendale’s Annual Yield Survey has only a few days left to get your farm’s yields. We will stop gathering data at 3:00 PM on Friday. We will release the results on Wednesday at 7:30 AM.
Weekly export sales data will be released at 7:30. Trade estimates are: for 2012/13 (old crop) corn -50 to +150 tmt and soybeans -100 to +150 tmt. For 2013/14 (new crop) corn 350 to 550 tmt, soybeans 600 to 900 tmt and wheat 350 to 550 tmt.
USDA weekly ethanol production was 820,000 barrels per day which was the same as a year ago. For the entire year total ethanol production equals 7.1% less than last year.
Corn harvest will start next week in Central IN. Yield prospects look good. Early corn harvest reports from MS and AR are 230 with some fields as high as 280 bu. per acre. Western KY is reporting 240 plus.
Old crop – New crop corn and bean spreads have become the feature in the grain futures markets going into the first notice day for the September contracts. Cash market premiums to the futures make it unlikely to see deliveries in corn. A Central IL processor is moving their bids based off of the Dec futures and not changing basis.
Chart watchers are looking at the 14.10 level in November soybeans as resistance. First level of support would be the gap left after Monday’s sharply higher opening. December corn contract has support at 4.75 and resistance at 5.08.
Outside markets are keeping a watchful eye Syria and what will the US do next. Crude Oil contracts are taking a breather at least for the moment. Speaker Boehner says the spending limit change will be in for a big fight.
Cattle traders are waiting for cash trade to develop this week. Bids in Southern Plains were limited at 121 to 122 compared to last week’s sales of 123. Beef cutout was mixed with choice up .19 and select down 1.24. Cash hogs were steady as packers fill needs going into the weekend. Pork cutout values were down 1.61 on Wednesday. Weekly egg sets were up 5% from last year and chick placements were up 1% compared to 2012.
Markets as of 5:00 AM
- Dec Corn -1 3/4
- Nov Beans -3 3/4
- Dec Wheat -1 1/2
- Oct Cattle +.07
- Oct Hogs -.17
- Sep Dlr +.41
- Sep S&P +2.25
- Oct Crude -.93
- Oct Gold -8.50
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