Will December Corn Hold Chart Support?
Jul 18, 2013
Good Morning! Paul Georgy with early morning comments for July 18, 2013 at 5:10 am. Grain futures are lower as weather models add a little more moisture for next week and the likelihood that the ridge will back out to the west. We are in the second stage of this year’s weather market which will last until corn is pollinated and we can see the kernels on the ear. NOAA will release its August forecast later this morning. The trade will be watching that data closely. December corn support, at 4.91, is important to watch because a close below that level could trigger further downside selling. Wheat market fundamentals are not that negative. Harvest will be more than 75% complete by weeks end. China continues to buy wheat to replace their poor quality harvest. Estimates are now suggesting China could purchase 10 mmt this year. Ethanol production data was less than last week but up 9.3% from last year. Ethanol production is 8.4% below a year ago while USDA is forecasting a year over year drop of 7.2%. At 7:30 this morning USDA will provide us with the Weekly Export Sales data. Old crop soybean sales could be a market mover as traders wonder how USDA will deal with tight bean supplies.
Trade estimates are from Reuters in thousand tonnes:
2012/13 Estimates 2013/14 Estimates
Corn zero-200,000 1,200,000-1,400,000
Soybeans zero-200,000 450,000-650,000
Soymeal 50,000-100,000 25,000-75,000
Soyoil 5,000-10,000 zero
Wheat ************* 900,000-1,200,000
Fed Chairman Bernanke’s comments yesterday were no help for commodities. Cattle futures have come under pressure due to technical selling and position squaring ahead of Friday’s COF report. Feedlots are hoping for a higher cash market this week but history suggest cash lows could be made. Boxed beef values continue to pressure packer margins. Choice was down 1.03 and select down .57. The CME Feeder Index was up .14 to 145.47. Wholesale pork product prices fell again on Wednesday, down .42. There is a full $11.36 between the June’s high and current wholesale pork prices. It is hard moving pork right now in the face of heat across the US. On the other hand cash hogs have been waging a battle in psychology. Cash markets have not fallen much from June highs. The Allendale Ag Leaders webinar is July 22.
Markets as of 5:10 AM
- Dec Corn -4 3/4
- Nov Beans -7 1/2
- Sep Wheat +1 1/2
- Aug Cattle -.07
- Aug Hogs +.30
- Sep Dlr +.08
- Sep S&P +1.25
- Aug Crude -.17
- Aug Gold +2.50
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