Lower Grains Start Expected
A lower start is expected across the floor this am, similar to overnight losses. The early call is down 5-7 wheat, 2-4 corn and 10-15 beans. There is a widespread feeling the market overdid it to the upside yesterday and that the threat of freezing temps next week in the Midwest was exaggerated. Crude oil and the $ index are both lower this am, sending mixed signals to the grains. Malaysian palm oil jumped 91 ringgit today, a mildly supportive background feature for bean oil.
Farmers took advantage of yesterday's big price run up to sell a lot of corn and beans in the cash market. This big jump in farmer selling caused the cash market to weaken sharply since yesterday afternoon. Cash grain bids in most of the Midwest were down as much as 18 cents for corn and in at least one case (Cedar Rapids, Iowa) the cash bid for beans fell just over $1 a bushel, to 32 cents under the Nov futures price. This big jump in farmer selling of corn and beans could bring increased hedging pressure to these pits today, if it wasn't done already yesterday and overnight.
Widespread fear of a possible freeze in the northern part of the Midwest yesterday has been replaced with a more cautious approach this am. The forecast calls for continued mild temps across the belt the next 6 days. Temps are then predicted to fall sharply the second half of next week. The questions then are how low will temps fall and how far south will they reach? The weather models, as is often the case, disagree on the answers. Many weather forecasters this am think freezing temps probably won't extend as far south (and therefore not do as much damage to corn and beans) as feared by the market yesterday. Meteorologix Weather thinks the best chance for any freezing temps is in the northwest part of the Midwest Tue-Thur next week. This is why prices retreated to lower levels overnight and are expected to remain under pressure this am. Traders will be waiting and watching the updated weather forecast late this am closely as it will help determine the market's direction this afternoon.
Farmers took advantage of yesterday's big price run up to sell a lot of corn and beans in the cash market. This big jump in farmer selling caused the cash market to weaken sharply since yesterday afternoon. Cash grain bids in most of the Midwest were down as much as 18 cents for corn and in at least one case (Cedar Rapids, Iowa) the cash bid for beans fell just over $1 a bushel, to 32 cents under the Nov futures price. This big jump in farmer selling of corn and beans could bring increased hedging pressure to these pits today, if it wasn't done already yesterday and overnight.
Widespread fear of a possible freeze in the northern part of the Midwest yesterday has been replaced with a more cautious approach this am. The forecast calls for continued mild temps across the belt the next 6 days. Temps are then predicted to fall sharply the second half of next week. The questions then are how low will temps fall and how far south will they reach? The weather models, as is often the case, disagree on the answers. Many weather forecasters this am think freezing temps probably won't extend as far south (and therefore not do as much damage to corn and beans) as feared by the market yesterday. Meteorologix Weather thinks the best chance for any freezing temps is in the northwest part of the Midwest Tue-Thur next week. This is why prices retreated to lower levels overnight and are expected to remain under pressure this am. Traders will be waiting and watching the updated weather forecast late this am closely as it will help determine the market's direction this afternoon.
posted by InsightPublishing at
10:30 AM
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