July 16, 2012
Producer Marketing Manager
Corn: As of 7:15 Up 27
For the 5th Sunday night in a row, corn traded higher and is nearing all time highs. Hot and dry conditions over the weekend as well as a 6-10 day forecast that points to above normal temps and below normal precip for most of the US. Expectations for this afternoon’s Crop Progress/Conditions Report to continue to drop ratings. I’ve attached a chart below on the rough blend economics for ethanol into gasoline at the rack. The spread has fallen significantly from its recent highs back in late March of nearly $1/gal to where it is today.
Soybeans: As of 7:15 Up 38
Much of the same in soybeans. Some analysts are starting to think that Brazil’s 12/13 soybean crop could surpass the US production if the drought in the Midwest continues. That would be the first time in US history. We continue to see demand for soybeans as a 150,000 MT sale to unknown destinations was announced by USDA on Friday. Continues to be a weather market. Technically all indicators are still bullish and is interesting to note that overnight we traded thru the key reversal we put in last Wednesday.
Wheat: As of 7:15 Mpls Up 17, KC Up 24
As a potential substitute feed grain, it continues to be a follower of corn. Rumblings of production problems in Europe as well as dryness in Australia also has the wheat market supported. Winter Wheat harvest in SD is on the downhill slide for most as Spring Wheat harvest just getting a good start. Good quality has been the theme on both this year.