USDA report neutral to friendly overall
Crude oil and the equity markets are higher this am, which is supportive for the grains. The $ is about unchanged, not influencing the grains either way at this time.
The USDA report was considered neutral to friendly overall and the early call is 2-4 better wheat, 4-7 up in corn and 5-8 higher beans. Most of the important numbers are in the tables but some other salient figures not included in these tables are: a lower corn yield guess of 153.4 bushels per acre vs 155.4 previously; no change in the amount of corn to be used to make ethanol in either the 2008-09 crop year, 3.75 billion bushels, or the 2009-10 crop year, 4.1 billion bushels; and no change in the amount of bean oil used to make biodiesel fuel (methyl ester), 1.75 billion lbs in the 2008-09 crop year and 2.2 billion lbs in the 2009-10 crop year.
Jul meal made a 10-month high yesterday amid talk it might be necessary to import small amounts of South American meal into the US this summer. Meal supplies are already tight and they are expected to become even tighter, reflected in the strong inverse (premium) of the nearby months to the deferred months. Some traders think Jul or Aug will eventually trade at a $100 premium to Oct or Dec, as it has done before on rare occasions when meal supplies were extremely tight. Similarly, some traders think Jul or Aug beans will eventually trade at a $2.00 or more premium to Nov. If you are a spread trader, you might want to bull spread either of these markets but beware, these old crop/new crop spreads can be very volatile.
Technicals: In my view, the daily bar charts still look bearish in wheat and oil, bullish in corn, beans, meal and oats. Beans and meal look especially strong with both these pits making new highs for the move yesterday.
Argentine wheat areas are forecast to stay mostly dry the next 7 days, further stressing the crop.
The US southwest winter wheat belt will see more rain in the north the next few days, up to 2". Harvesting hasn't reached this far north yet so rain shouldn't be a problem for now. The midwest will see more rain in the west today, up to 1.5" and additional rain is forecast this weekend, which shouldn't be a problem as planting is finished. The east will see rain the next two days mainly in the southern 2/3rds of the belt, delaying bean planting. More unwelcome rain is forecast this weekend. ---Vic Lespinasse
The USDA report was considered neutral to friendly overall and the early call is 2-4 better wheat, 4-7 up in corn and 5-8 higher beans. Most of the important numbers are in the tables but some other salient figures not included in these tables are: a lower corn yield guess of 153.4 bushels per acre vs 155.4 previously; no change in the amount of corn to be used to make ethanol in either the 2008-09 crop year, 3.75 billion bushels, or the 2009-10 crop year, 4.1 billion bushels; and no change in the amount of bean oil used to make biodiesel fuel (methyl ester), 1.75 billion lbs in the 2008-09 crop year and 2.2 billion lbs in the 2009-10 crop year.
Jul meal made a 10-month high yesterday amid talk it might be necessary to import small amounts of South American meal into the US this summer. Meal supplies are already tight and they are expected to become even tighter, reflected in the strong inverse (premium) of the nearby months to the deferred months. Some traders think Jul or Aug will eventually trade at a $100 premium to Oct or Dec, as it has done before on rare occasions when meal supplies were extremely tight. Similarly, some traders think Jul or Aug beans will eventually trade at a $2.00 or more premium to Nov. If you are a spread trader, you might want to bull spread either of these markets but beware, these old crop/new crop spreads can be very volatile.
Technicals: In my view, the daily bar charts still look bearish in wheat and oil, bullish in corn, beans, meal and oats. Beans and meal look especially strong with both these pits making new highs for the move yesterday.
Argentine wheat areas are forecast to stay mostly dry the next 7 days, further stressing the crop.
The US southwest winter wheat belt will see more rain in the north the next few days, up to 2". Harvesting hasn't reached this far north yet so rain shouldn't be a problem for now. The midwest will see more rain in the west today, up to 1.5" and additional rain is forecast this weekend, which shouldn't be a problem as planting is finished. The east will see rain the next two days mainly in the southern 2/3rds of the belt, delaying bean planting. More unwelcome rain is forecast this weekend. ---Vic Lespinasse
posted by InsightPublishing at
10:30 AM
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