Johnston Pro Farmer Senior Markets Editor
as of 7:00 a.m. CT
Keep an eye on the
charts... There's no doubt the corn and soybean markets have seen
sharp price pressure so far this week. But the "ability" of the markets
to come off session lows and respect some important support levels yesterday could
signal the market is searching for support. I only say "could signal,"
as the only thing I feel "sure" about is prices will remain volatile!
The grain markets could certainly see an extended price correction near-term and
still remain in their longer-term uptrends.
I also wonder
how much price pressure the corn and soybean markets would have seen so far this
week if it weren't for the sharp decline in the crude oil market. Outside market
influences have provided spillover speculative-related selling pressure.
we have to respect the seasonals of the market and the trend. As I wrote last
week (as I do each year before July 4th), trends are typically accelerated or
reversed after the July 4th period. The recent rains we have received have been
timely, and the market perceives them as beneficial for the crop.
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: 7 to 10 cents lower. Futures were weaker overnight amid continued
liquidation pressure. Futures saw sharp early pressure yesterday on spillover
from Monday's limit losses and overnight rains. Traders say the weather models
signal some more rains are in the near-term forecast and temps should moderate,
keeping crop stress at bay. Futures were also pressured as Monday's crop condition
report showed slight improvement in the crop.
Soybeans: 6 to 11 cents
higher. Futures were firmer overnight amid short-covering. Futures gapped
sharply lower yesterday on spillover from Monday's mostly limit lower performance.
Spillover pressure came from recent rains and a milder near-term forecast. Futures
came off session lows around midday amid short-covering, signaling a potential
near-term low has been posted. To confirm this, futures need to respect support
at Tuesday's lows.
Wheat: Narrowly mixed. Futures were narrowly
mixed overnight, favoring a slightly weaker tone. Futures opened lower yesterday
and extended losses early on spillover from sharp losses in neighboring pits.
Around midday, however, futures came off session lows and trimmed losses and closed
mixed. The high-range close signals the potential for spillover support this morning,
but how neighboring pits and outside markets perform will also be important. Some
of the support in the wheat pit came on spread unwinding with the corn market.
Cash cattle expectations:
Watching beef market. General strength in the beef market has traders
looking for at least a dollar improvement in the cash market from last week's
$101 to $102 trade. This week's showlist is smaller, which should give feedlots
some bargaining power. But with cash trade still not likely until Friday, choppy
trade in futures is expected.
Futures call: Mixed. Futures
are called to open mixed on the possibility of short-covering, but could see spillover
from yesterday's losses. Further downside risk should be limited as the beef market
remains strong and traders generally look for at least a dollar improvement from
last week's $101 to $102 trade. This week's showlist is smaller, which should
give feedlots some bargaining power. But with cash trade still not likely until
Friday, choppy trade is expected today.
hog expectations: Steady to weaker. Despite very strong profit margins,
packer demand for hogs remains lackluster, as they say adequate supplies are being
seen. A couple of plants have increased their Saturday kill requirements, but
so far, cash sources say most are sticking with their original plans for a moderate
Saturday kill. The cash hog market is called steady to weaker again this morning.
Hog futures: Mixed. Futures are called on more spreading
and range-bound trade. August lean hog futures posted an inside day of trade on
the charts yesterday, remaining within the boundaries of the recent consolidation
range. Support lies at last week's low of $70.20 and resistance lies at the recent
high of $71.70. s