CBOT Grain Futures Calls:
-December corn called 1 to 3 higher.
-November soybeans called 10 to 15 higher.
-December CBOT wheat called 2 to 5 higher.
US dollar is down 5 at 78.00. October crude is up $.46 at $72.95. Dow futures are up 28 points.
-Commerce Department report on personal spending is expected to show a .2% increase during July. June levels were up .4%.
-China’s number two phone carrier agrees to carry the iPhone in China. This gives Apple access to the world’s largest phone market.
-Economists expect growth in this current quarter. That would end the four quarter recession. Unemployment is not expected to peak until spring.
-A strike at the world’s second largest platinum plant, Impala Platinum’s Rustenberg South Africa location, spread to another mine nearby. 20,000 workers have been striking since Wednesday.
-Britain reports its GDP in the second quarter fell less than expected.
Go to our homepage, www.allendale-inc.com, to view our latest market update videos, recorded twice a day (before and after the grain market session).
-No change in the forecast this morning. Light rains will finish today and early tomorrow then dry conditions will last all next week. Moderate weather and no frost is the forecast.
Grain Market Influences:
Corn summary… What is bullish of this market are the what “if’s”. What is bearish is if the bullish what “if’s” don’t develop. IF we get a frost prior to maturity there will be crop loss and it will be bullish. How bullish? There is no frost forecast through Sept 10 (the latest map). But if a frost hit before 09/20, you would probably see +370 prices. Could it hit 420? If the entire growing area were hit it might be based on speculative emotion. But reality is there would be poor quality crops and end user reluctance to pay up.
Malaysia bought 60,000 tonnes of Brazil corn.
Soybean summary… Futures started higher on tight Sept supplies and the 2.1 mmt export sales report. China bought double the beans traders expected. They accounted for 78% of all new crop sales. Unknown, which could be China too, bought 15% of it. Then outside markets broke which allowed beans to take some of the frost premium out of the market due to a warmer forecast. Late in the day, outside markets rallied and old crop beans responded with an impressive rally to resistance.
Argentine farmers start their seven day strike against deliveries of soybeans, grains, and beef today in protest of export taxes. This will have no effect on the market at this time but will be a precursor to their actions this spring.
Taiwan purchased 60,000 tonnes of US soybeans.
One India based analysis firm projects India’s soybean production will be down 19% due to smaller than usual monsoon rains.
Wheat summary… The seasonal tendency to bottom futures is very strong. In fact, we should be in an uptrend. But overwhelming world supplies of starched grains keeps a lid on the market. We want to sell Chicago wheat on a rally and not risk much. We are short options and exited a spread.
Japan purchased 56,349 tonnes of food wheat in its regular tender. None will be US sourced.
Jordan seeks 100,000 tonnes of any origin wheat. Their last purchases were Black Sea origin.
USDA’s CCC bought 113,780 tonnes of wheat for donation to Ethiopia and Yemen.
Rains in Australia this weekend may not fix their dryness problem.
Contact Allendale to schedule a speaker for your Fall/Winter meetings!
-Wholesale beef closes down $.64 for choice and down $.68 for select.
-Pork carcass cutout closes up $2.52.
-Cash hogs are called steady.
October Lean Hogs are called 40 to 70 higher.
----Chart support 43.40 and resistance 52.00
October Live Cattle futures called 20 to 40 higher.
----Chart support 87.00 and resistance 89.75.
October Feeder Cattle futures are called 10 to 20 lower.
----Chart support 99.65 and resistance 102.00.
Livestock Market Influences:
Lean hogs summary… It was good to see the trade shake off any remaining fall-out from the Time magazine article we mentioned. One thing we must point out. Though we were correct in identifying this market as undervalued a couple weeks ago, we did not think this market would be finding more good news at these higher prices. Wholesale pork moved up $2.52 today due to yet another big jump in ham prices ($8.21)! It would appear that rumor about a large packer finding renewed export demand actually was true.
Live cattle summary… There are quite a few things we can talk about today for cattle. Let’s start out with the big news…live based cash cattle traded up $1.50 to $2 at $85 today! Cash is correctly moving higher as that transition from big summer to tight fall/winter supplies is happening. This also helps alleviate the problem the trade had with October’s premium. If traders want to have a normal cash to October premium once August expires, then that means October would be $87.18.
CBOT Grain Futures Calls: