CBOT Grain Futures Calls:
-December corn called steady to 2 higher.
-November soybeans called 1 to 3 higher.
-December CBOT wheat called steady to 2 higher.
US dollar is down 3 at 77.07. October crude is up $.43 at $71.74. Dow futures are down 3 points.
-Weekly unemployment benefit claims expected to show 560,000 from the previous week’s 570,000.
-American Petroleum Institute guessed US oil stocks fell a huge 7.2 million barrels last week. The Department of Energy’s EAI will release the master numbers today. The trade is expecting a 1.5 million barrel drawdown in crude stocks, a 700,000 barrel increase in distillates, and a 1.4 million barrel decline in gasoline stocks.
-Yesterday the Bank of England left short term rates unchanged.
-US trade data, for the month of July, will be released today.
-Australia reported monthly job losses at 27,100. That was double the 12,500 losses expected.
-International Energy Agency upped its forecast of world oil demand by .5 million barrels per day to 84.4 mbpd. 2010 oil demand is seen 1.3 mbpd higher than current year levels.
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).
-One model is suggesting frost for September 23 and 24 in the far northern plains and northwestern cornbelt. Forecasters are downplaying any potential damage to the crop. For the next 10 days the forecast suggests net drying in the east and periodic rain in the west with little crop threat.
Grain Market Influences:
The Federal Reserve’s Beige Book indicated the recession may be ending and the economy could be growing.
Corn summary… It was another day where outside markets were suggesting a rally in corn but traders were not eager buyers. There is likely not many who want to be heavy buyers ahead of a potentially bearish USDA report. What we end up getting this week, heading into Friday, is low volume trade. Right now the trade estimates are for a corn production number of 12.932 billion bushels which is a yield of 161.5. Along with this is the all important carryout number that trade estimates are looking for 1.768.
The average guess for Friday’s supply/demand report is to see ending stocks go from 1.621 to 1.768 billion bushels.
Taiwan purchased 60,000 tonnes of US corn overnight. A separate Taiwanese company purchased 58,000 tonnes of US corn overnight.
China has cut its corn production estimate to 165.5 mmt due to severe drought in parts of the country. This is only down .3% from last year’s 165.92. Some analysts had been expecting a 10% drop.
Soybean summary… Unlike corn, the bean market is not trading close to a strong support level. It is subject to trading lower despite another day of supportive outside markets. Yesterday gave sellers a chance for some profit taking and that allows this market to slide again. Once again the old support that is now acting as resistance (940) held and this market found selling on each attempt to trade higher on the day.
China has estimated its soybean imports in 2009/10 would run 40.6 mmt. USDA has that number pegged at 38.1 mmt.
Taiwan purchased 58,000 tonnes of US soybeans overnight.
Wheat summary… Once again the question is where really IS the bottom of this wheat? Outside markets were just as supportive to wheat as it was to other grains. A falling US dollar should even have more influence on wheat than the row crops. What we do know is that it is never a good idea to stand in front of a trending market.
The UN purchased 24,000 tonnes of Black Sea origin wheat for donation to Sudan and Ethiopia.
Bangladesh has issued a new wheat tender, this time for 60,000 tonnes of wheat.
Taiwan purchased 54,300 tonnes of US wheat overnight.
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-Wholesale beef closes up $.19 for choice and down $.11 for select.
-Pork carcass cutout closes up $.86.
-Cash hogs are called steady.
October Lean Hogs are called 10 to 30 higher.
----Chart support 46.500 and resistance 51.20
October Live Cattle futures called steady to 10 higher.
----Chart support 86.20 and resistance 89.75.
October Feeder Cattle futures are called steady to 10 higher.
----Chart support 96.65 and resistance 101.50.
Livestock Market Influences:
Lean hogs summary… Big gains were made in the summer 2010 contracts today. June was up a full $2 on the day’s close. The hope is that we are doing big sow slaughter right now which is supportive for the mid 2010 supply picture. We do like the idea itself and also the idea of being bullish most 2010 contracts. We will have lower supplies and will likely have fixed some of the export problems by then.
Live cattle summary… Between hogs and cattle, no one will argue cattle is the one typically influenced by outside factors such as index fund buying and other factors. With that in mind, it is interesting to see hogs post good gains, partially on the lower US dollar, but cattle only mustered moderate gains.
CBOT Grain Futures Calls: