Reports on the Backburner

September 29, 2008 07:00 PM
 

Julianne Johnston Pro Farmer Senior Markets Editor


From Pro Farmer

Updated as of 7:00 a.m. CT

Reports to be released this morning... USDA will release their Quarterly Grain Stocks Report and Small Grains Summary this morning. Typically, traders will be digesting reports and factoring the data into prices. But it would take a pretty big surprise out of today's report to influences prices today. Focus remains clearly on the economic situation.

Still, these reports are important -- even if their impacts aren't felt until down the road, as the grain stocks report sets 2007/08 carryover for corn and soybeans. Compared to USDA's S&D Report earlier this month, traders look for a tighter old-crop corn carryover, which is currently at 1.576 billion bu. and a slight increase in soybean carryover, which is currently at 140 million bushels.

Grain Stock Expectations

Avg.

Range

June 1, 2008

Sept 1 2007

in billion bushels

Corn

1.546

1.456-1.625

4.028

1.304

Soybeans

0.144

0.125-0.172

0.676

0.574

Wheat

1.932

1.872-2.253

0.306

1.717

Just small revisions to this final wheat crop data from USDA's August Crop Production Report is expected.

Small Grains

Avg.

Range

USDA Aug

USDA 2007

in billion bushels

All wheat

2.459

2.421-2.475

2.462

2.067

All winter

1.872

1.845-1.883

1.875

1.516

HRW

1.053

1.040-1.062

1.055

0.962

SRW

0.603

0.587-0.611

0.609

0.358

White

0.222

0.210-0.245

0.211

0.197

Spring

0.495

0.461-0.507

0.501

0.479

Durum

0.086

0.083-0.088

0.087

0.072

Check "Leading Edge Reports" for full details and analysis.

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: 8 to 10 cents higher. Futures were firmer overnight amid short-covering. Futures gapped lower on the open and closed their 30-cent limit lower in all contracts. As a result, expanded limits of 45 cents (50% of Monday's limit plus the 30 cent limit) are in effect Tuesday. Focus today will remain on the economy. End-of-the-month position squaring will also be a factor. Unless there's a big surprise, USDA's Grain Stocks Report will be pushed to the backburner.

Soybeans: Mixed. Futures were mixed overnight on a combination of spillover pressure and short-covering following yesterday's limit losses. Futures settled limit lower in all contracts to start the week. That means trading limits are expanded to $1.05 Tuesday. USDA's Quarterly Grain Stocks Report will set final 2007-08 soybean carryover this morning. But the data is likely to be overshadowed by outside markets. November soybean futures violated the Sept. 18 low at $11.00, meaning bears' next downside target is the April low of $10.60. Below that level, support is at $10.04.

Wheat: 11 to 16 cents higher. Futures were higher overnight amid short-covering. Futures began the week under heavy pressure, but avoided a limit-lower close which was posted in corn and soybeans. Wheat opened under pressure on financial concerns and heavy spillover from neighboring pits. While wheat was clearing in a follower's role, massive fund liquidation left the wheat market with nowhere to go but down.


Cash cattle expectations: Watching beef trade. Boxed beef prices were 9 cents higher to 35 cents lower Monday, while movement totaled only 232 loads. With cattle futures in a downtrend and concerns about beef demand amid rising financial woes, traders are expecting steady to lower cash cattle prices in the Plains this week.

Futures call: Weaker. Futures are called lower on spillover from yesterday's losses. Futures gapped sharply lower on the open and extended losses as sell stops were triggered. Economic concerns were behind the pressure, as traders are concerned consumers will pull back spending, which would impact meat demand. Futures moved to fresh session lows ahead of the close. April and June live cattle closed limit lower, with October, November, January and March feeders limit lower.

Cash hog expectations: Steady to weaker. Cash hog bids are expected to be steady to lower across the Midwest today as packers work to keep margins from falling below breakeven. Cash sources signal market-ready supplies are abundant and packers are having trouble moving enough pork to keep the pipeline from backing up amid slackened demand.

Futures call: Lower. Futures are called to open lower as momentum is with bears. To start the week, futures closed lower in all but the May 2009 contract. Futures opened lower and faced moderate to heavy pressure in many contracts throughout much of the session. But late short-covering, especially in far-deferred contracts, pulled futures off well off session lows into the close.


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