Morning Market Insight
July 26th, 2012
Drew Johnson
Grain Marketing Specialist

As of 7:40am Old crop up 2 New crop up 4

Values recovering from Tuesday’s losses as trade continue to wonder about final production numbers. Trade is sure that all crops G/E ratings are going down on Monday. Numerous crop tours have put final yield in a range of 121-135. USDA is now projecting food prices to rise 3-4% next year because of the drought. Informa Group to estimate crop production on Friday morning.  Weather dry long term. Traders see that it is too late for any rain to change the game. USDA next report August 10th. The only thing to note is have traders brought prices high enough to curb demand? New crop corn support at $7.50 and resistance at $8.00. Old crop support at $7.75 and resistance at $8.25. Look to see volatility for the remainder of the week.

As of 7:40am Old crop down 6 New crop down 6

Soybeans rebounded yesterday as traders are becoming more anxious with possible soy catastrophe. Trade is remaining skeptical over short term wet weather forecasts. Will rain now actually help?? Long term weather forecasts have hot and dry in the west belt and cool and wet, but below normal precip, for the east belt for the next 8-14 days. Some areas in Indiana are reporting that the soybeans are literally dying. Informa will estimate crop yield potential on Friday morning. Look to see trade bounce between highs and lows until some new news comes available and can push soybeans past the new highs. New crop support levels still at around $15.50 and resistance at $17.00. Old crop at support at $16.50 and resistance around $17.50  

As of 7:40am Spr. Wheat up 2 Win. Wheat up 2

Wheat values surging somewhat with the corn, yesterday however wheat has its own piece of news. Trade hears rumors that Russia in talking about initiating an export ban. If you recall Russia also did this in 2010 as result of drought and really made wheat prices interesting in 2011.  The fear is Russia will be anywhere’s from 5 to 8 mmt below the USDA projection because of drought again this year. Right now Russia is actively buying Chicago and Minneapolis wheat futures. The annual spring wheat tour is finding some good wheat in the country after day one of their fact finding. Most noting that there is a lot of wheat harvested and that wheat harvest is way ahead of what any of them can remember. Support for spring wheat at $9.15 and resistance at $10.00. Winter wheat support around $8.70 and resistance at $9.44.