Johnston Pro Farmer Senior Markets Editor
as of 7:00 a.m. CT
Some of the reasons
to be bearish corn are vanishing... After a sharp climb to new all-time
highs in late June, corn futures saw a $2-plus profit-taking decline. Besides
the need to take some profits, traders noted reasons such as crop improvement,
the likelihood USDA would allow for a penalty-free CRP early-out, slowing demand
and outside market pressures as behind the decline.
those reasons are still there... crops are still improving according to USDA's
weekly condition reports and outside markets are bearish. But the recent boost
in export demand and news of ethanol plants reopening lines to buy more corn,
as well as yesterday's
CRP announcement, take some of the reasons to be "bearish" out of
So, could the tide be turning for the corn
market? It's possible. To signal a technical bottom, futures still have some
work to do. Also, we'll keep an eye on the weather. If hot temps -- as predicted
-- enter the Corn Belt next week, it could put pressure on the crop as it pollinates.
There is still a lot of growing season left... Geez, I hope so anyway, we certainly
don't need an early frost to take another nip out of production!
your comments coming. Always good to have conversation with you and input
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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 3 cents higher. Nearbys were slightly higher, with some deferred
contracts around 10 cents higher on USDA's decision not to allow a penalty-free
early out on the CRP for the 2009 cropping season. After a weaker open yesterday,
corn futures moved off session lows and turned higher in afternoon trade to post
double-digit gains and bullish reversals. Early pressure came from sharp losses
in the crude oil market, strength in the dollar and improvement in the condition
of the crop. But corn futures were able to shrug all of that off, as traders turned
their focus to demand.
Soybeans: Mixed. Futures were 3 cents lower
to 2 cents higher overnight. Futures rebounded from sharp losses yesterday to
close mostly 5 to 16 cents lower, which was near session highs. November soybean
futures gapped lower yesterday but filled the gaps to hold in the short-term consolidation
range. Resistance starts at Monday's high of $14.03 1/2 and extends to the top
of the July 21 gap at $14.47. Tuesday's low at $13.53 is initial support.
3 to 6 cents lower. Futures were weaker overnight amid a lack of fresh news.
Futures closed mostly mostly weaker yesterday, but well off session lows. Wheat
faced heavy spillover pressure from neighboring pits and outside markets on the
open yesterday, but as corn came off session lows and eventually pushed sharply
higher, wheat trimmed losses to post a high-range close. Price action Wednesday
will be largely dependent on what happens in corn, crude oil and the U.S. dollar.
Cash cattle expectations:
Watching beef market. The beef market is showing signs of life, with
Choice values up $1.92 and Select up 64 cents yesterday on solid movement of 293
loads. Strength in the beef market to start the week signals prices are back to
levels that are attracting featuring and could stabilize the cash market later
in the week.
Futures call: Firmer. Futures are called
to open firmer on spillover from yesterday's gains. Futures benefited from late
short-covering support yesterday as traders reevaluated positions. Upside potential
in the early going was limited as traders still have the slightly bearish Cattle
on Feed and Cattle Inventory Report on the minds. October live cattle posted an
upside day of trade on the charts to finish in the upper quarter of the daily
range. Futures need consecutive closes above the $106.00 level to signal a near-term
low has been posted.
hog expectations: Mostly steady. Cash hog bids were steady at most
locations yesterday, although there were some scattered firmer bids. Traders anticipate
cash strength waning, however, as most packers have this week's needs largely
covered. Packers may lower cash bids in an attempt to boost cutting margins, which
remain in the black, but are down considerably from recent levels.
Hog futures: Mixed. Futures are called to open mixed on the possibility
of short-covering following yesterday's losses and move off session lows in most
contracts. October lean hog futures violated uptrending support from the July
8 low and also dropped below the 40-day Moving Average. Today's low at $71.35
is key near-term support. A drop through that level would confirm a short- term
top and open the downside to the July 1 low at $68.40. To the upside, last Friday's
high at $74.50 is solid resistance.