Pro Farmer Senior Markets Editor
Updated as of 7:00 a.m. CT
|No Bullpen next week. I'll
be helping out at our county fair. |
much has crop recovered?... After yesterday's sharp losses, corn futures
are back near the top of the pre-flooding trading range. December corn closed
below the May high. So this begs the question, "Should the market really
be assuming a larger carryover than one or even two months ago?" I'm not
convinced demand has slowed to the point where we should assume even a larger
new-crop carryover; or that the crop has recovered to the point where we should
"assume" a trend or better yield.
I do appreciate
the corn crop has posted a solid recovery since the massive flooding -- perhaps
even more than I initially expected. But I'm not convinced this crop is "made,"
as there are still a lot of holes in this crop. Drowned out spots were massive
this year and from the air, Iowa looks like abstract quilt of sorts, much unlike
the uniform squares and rectangles typically seen as the growing season progresses.
We can usually expect several weather-related scares during
a cropping season... and this year is far from over. There will be more weather
scares. But in the meantime, corn needs to find a landing spot above uptrending
support to avoid even a steeper decline that would deepen technically based selling.
Keep your comments coming. Always good to have conversation with
you and input on what you'd like to talk about. E-mail
your comments/question to me by clicking here. Please include your location.
Opening calls. These calls originate
more than three hours before the open -- use caution, things change:
Corn: 1 to 4 cents lower. Futures were weaker overnight on spillover
pressure and a round of showers over the central Corn Belt. Futures closed 26
to 27 cents lower on improved weather forecasts and outside markets. December
corn penetrated and posted the first close below the early May high to return
to the top of the post-flood trading range.
Soybeans: 6 to 8 cents higher.
Futures were firmer overnight on short-covering. Futures closed mostly around
50 cents lower yesterday, with pressure coming from moderating weather forecasts
and news the Argentine Senate rejected the soybean export tax. The soybean market
had a large Argentine premium priced in. November soybean futures respected support
at the previous's low and the June low of $14.83. If futures dip below this level,
it could trigger more active sell stops.
Wheat: Mixed. Futures
were mixed overnight, favoring a slightly lower tone. Futures closed mostly around
20 cents lower, seeing spillover from neighboring pits and a better world crop
prospects. Outside markets contributed to weakness in the grain markets, with
a stronger dollar and weakness in crude oil weighing on wheat. September Chicago
wheat futures respected support at yesterday's low of $7.97, but a slip through
that level could trigger sell stops.
cattle expectations: $1 to $4 lower. The bulk of this week's cash
trade occurred between $97 to $98, with wrap-up sales reported at $97 Thursday.
Futures call: Weaker. Futures are called lower based
on spillover from yesterday's losses, but are due for short-covering given the
oversold condition of the market. But momentum is clearly with bears. Most contracts
posted bearish reversals yesterday. Next support for October live cattle lies
at the mid-point of the entire trading range, at $104.70 and extends to the mid-May
low of $104.15.
hog expectations: Steady to firmer. Early expectations are for steady
to firmer cash bids again today as packers are still in need of supplies. Cash
sources say next week's marketings are expected to be tighter, which could result
in followthrough cash strength.
Hog futures: Mixed. Futures
closed mixed yesterday, with nearbys firmer on cash improvement. August lean hogs
hold a small premium to the cash index, which is projected to rise 74 cents to
$75.26. Given expectations for additional cash strength next week, August futures
could see spillover support this morning.