Day of consolidating grain prices likely
A day of consolidating prices is likely today. Overnight trading resulted in mixed prices by the 6am Central time close. (Remember, starting July 1 overnight trading will end at 7:15am Central time.) The outside markets are mixed with crude oil a little lower while the $ and equity markets are a little higher, at least as of this writing. There isn't a lot of fresh market moving news to drive prices sharply in either direction this am.
The big USDA acreage report is now less than a week away and trade averages for this report should be out by Friday.
The Senate Permanent Subcommittee on Investigations issued a report blaming index funds for the lack of convergence in the wheat market over the last year. The report said excessive index fund buying fueled the huge price run up in 2008 and that the Commodity Futures Trading Commission should clamp down on index funds, eliminating waivers on position limits and/or reducing position limits. The report said index funds held between 35-50% of the open interest in wheat since 2006. This report will not have any impact on the wheat market today or anytime soon. Longer term there could be some changes implemented by the CFTC but we will have to wait to see what they do.
Technicals: The wheat chart still looks like it is headed lower but corn and the bean complex appear to have put in a "spike" bottom a couple of days ago and look like they are headed higher now, at least in my view. However, I am a trend follower and need trending markets to make money. Lately the markets have been chopping around, higher one day, lower the next. Long live the trend!
Indian government officials warned that the monsoon, which 60% of Indian agriculture is dependent on, is likely to be below normal this season, about 93% of average for the 4 month season which started June 1. They said it is likely there will be an El Nino weather pattern this season, which is associated with below normal monsoons. A poor monsoon in India might lend long-term bullish support for US grain prices. Over the last few days the monsoon has started to make further progress to the north but it is still too far south for this time in the season.
Some badly needed rain is forecast this weekend in Argentine wheat areas but the driest parts of the belt will probably see the least amount of moisture. Some much needed rain is forecast in the dry parts of the Canadian Prairies the next several days. Crops remain about 2 weeks behind normal in the province of Alberta, according to government officials there. Up to June 18, less than half the normal rain had been seen in this province so far this season.
The southwest US winter wheat belt will see generally favorable harvest weather the next several days. The Midwest will see hot temps and scattered rain the next several days, a welcome combination in most parts of the belt. ---Vic Lespinasse
The big USDA acreage report is now less than a week away and trade averages for this report should be out by Friday.
The Senate Permanent Subcommittee on Investigations issued a report blaming index funds for the lack of convergence in the wheat market over the last year. The report said excessive index fund buying fueled the huge price run up in 2008 and that the Commodity Futures Trading Commission should clamp down on index funds, eliminating waivers on position limits and/or reducing position limits. The report said index funds held between 35-50% of the open interest in wheat since 2006. This report will not have any impact on the wheat market today or anytime soon. Longer term there could be some changes implemented by the CFTC but we will have to wait to see what they do.
Technicals: The wheat chart still looks like it is headed lower but corn and the bean complex appear to have put in a "spike" bottom a couple of days ago and look like they are headed higher now, at least in my view. However, I am a trend follower and need trending markets to make money. Lately the markets have been chopping around, higher one day, lower the next. Long live the trend!
Indian government officials warned that the monsoon, which 60% of Indian agriculture is dependent on, is likely to be below normal this season, about 93% of average for the 4 month season which started June 1. They said it is likely there will be an El Nino weather pattern this season, which is associated with below normal monsoons. A poor monsoon in India might lend long-term bullish support for US grain prices. Over the last few days the monsoon has started to make further progress to the north but it is still too far south for this time in the season.
Some badly needed rain is forecast this weekend in Argentine wheat areas but the driest parts of the belt will probably see the least amount of moisture. Some much needed rain is forecast in the dry parts of the Canadian Prairies the next several days. Crops remain about 2 weeks behind normal in the province of Alberta, according to government officials there. Up to June 18, less than half the normal rain had been seen in this province so far this season.
The southwest US winter wheat belt will see generally favorable harvest weather the next several days. The Midwest will see hot temps and scattered rain the next several days, a welcome combination in most parts of the belt. ---Vic Lespinasse
posted by InsightPublishing at
10:30 AM
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