CBOT Grain Futures Calls:
-December corn called 1 to 3 higher.
-November soybeans called 1 to 3 higher.
-December CBOT wheat called 1 to 4 higher.
US dollar is up 26 at 78.56. October crude is down $.26 at $71.79. Dow futures are down 23 points.
-Signs of economic recovery, or at least near the end of the recession, continue.
-Commerce Department will release durable goods orders increased 3% in July. That is up from a 2.2% drop posted for June. Some suggest part of the increase is related to “Cash for Clunkers”.
-Commerce Department will report on new home sales this morning. The trade expects July sales increased by 1.6% in July to 390,000 units. That would be up slightly from the 384,000 posted in June.
-Yesterday, the Case-Shiller Home Price Index reported second quarter home prices rose 1.4% from first quarter levels.
-Tuesday’s American Petroleum Institute reported a 4.3 million barrel increase in weekly crude oil stocks. The Department of Energy’s EIA will release the master report later this morning. Traders note the API report has become better at guessing the EIA numbers recently.
-Crude oil futures have not been able to post a close over the important $75 psychological resistance level.
-In the case Bloomberg LP v. Board of Governors of the Federal Reserve System, a judge has ruled the Fed must disclose which banks received emergency loans during the worst of the recession time. The Fed has five days to comply with the order. Some suggest this could cause concern about the financial system again.
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).
-Moderate rains and moderate temps are in the forecast. Lows for this weekend will be in the 40’s…no frost in the current forecast. From here on out, more detail on weather can be found on the 830 AM Grain Fundamentals 1 page.
Grain Market Influences:
The CFTC has announced it will reduce the position limits allowed by ETF investors. It will also add more detail in its weekly Commitment of Traders report.
Crop ratings, out yesterday, were increased by 2% for corn, increased 3% for soybeans, and decreased 2% for spring wheat. The trade was expecting a steady to 1% lower reading.
Corn summary… Early forecast for some frost in northern ND, MN, and WI this weekend, along with talk of inflation and strong crude oil started the day with aggressive buyers under this market. But improving crop conditions, wavering mid-day forecasts, and a drop in crude oil below 72 (this week’s support) caused futures to drop 11 cents from the high to settle 8 lower. Frost will be the main and only bullish issue for this market until October 1 when many states will enter the hard dent stage and crops will be harvestable regardless of frost.
Taiwan purchased 60,000 tonnes of corn from Brazil. South Korea purchased 105,000 tonnes of US corn for March delivery overnight.
Soybean summary… A shortage of old crop beans has caused concern that a squeeze play in September futures could take place. But today the cash market remained flat at the river (deliverable warehouses) with bids against Nov futures. This meant that the September futures got to an 80 cent premium over some cash markets. Even if you figure a 25 cent lift and warehouse fee, it would still pay to ship to delivery. That leaves the September over priced.
South Korea is seeking 110,000 tonnes of soymeal for February delivery.
China sold 9,600 tonnes of soybeans in its weekly auction attempt of 500,000 tonnes. In total, the government has sold 20,300 tonnes now in these auctions.
One floor source of ours, known for being on the hype end of reason, is suggesting there are rumors that Brazil may import US soybeans. While there is a price differential, we doubt this will happen.
Wheat summary… There are valid concerns about Argentina and now Australian production. However, offsetting some of those concerns was the better than expected Canadian wheat estimate from Statscan and the higher revisions posted for many EU crops. This morning we now see Kazakhstan’s grain crop has rebounded. Other new news for today is word Egypt is seeking one cargo of wheat of 30,000 to 60,000 tonnes. If it were early this year, that could balloon into a 300,000 tonne sale. These days, Egypt is doing just fine due to big inflows from Russia and France.
Japan raised its weekly tender amount, noted yesterday at 160,000 tonnes, up to 200,000 tonnes.
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-Wholesale beef closes up $.70 for choice and up $1.13 for select.
-Pork carcass cutout closes up $2.51.
-Cash hogs are called steady.
October Lean Hogs are called 20 to 40 higher.
----Chart support 43.40 and resistance 52.00
October Live Cattle futures called 10 to 20 lower.
----Chart support 87.00 and resistance 89.75.
October Feeder Cattle futures are called steady to 10 lower.
----Chart support 99.65 and resistance 102.00.
Livestock Market Influences:
Lean hogs summary… Are things actually changing right now in the wholesale pork market? Two days ago posted a $2.45 jump. Yesterday posted a 7 cent gain. Today, it posted a strong $2.51 gain. This makes it a $5.03 jump in three days. The real shocker is that most of this price push is being made by one cut. Hams have risen $15.75 in those three days. Normally, we do not like the pork cutout being driven by one cut. It’s not unusual for a quick break the other way.
Live cattle summary… While the recent jump in pork prices is surprising, we should not feel the same about the recent uptrend in beef. Wholesale beef closed up 70 for choice and $1.13 for select. Showlist numbers have come in lower than last week. That general trend may hold now. Keep in mind, after this week slaughter levels typically are making the transition from big summer kills to low winter kills. Cash cattle may trade $1 to $2 higher from last week’s $83/$83.50. The last big thing we just got today was the jump in Consumer Confidence. You may remember the last Confidence report was disappointing and cattle fell.
CBOT Grain Futures Calls: