June 22, 2012
Producer Marketing Manager
Corn: As of 7:30 Up 9
Commodity selling was the theme yesterday that seemed to start mid-morning and increased throughout the trading session. A lot had to do with outside markets as Crude Oil traded to its lowest level since October of last year, $78.35 per barrel. The Dow was also down 2% on the day, dropping 261 points to 12,502, and the dollar up 0.9%. As of this morning outside markets have stabilized and are trading higher, lending support to grains. Fundamental reasons also factored in as weekly export sales came out at 171,000 tons, below trade guesses of 350,000 tons, and continued chatter of slowing ethanol demand. I want to mention the December contract traded to new highs for the move yesterday at $5.68 before selling off. We had producers with target orders in place to price New Crop corn at $5.00 cash (-0.68 New Crop basis at most shuttle and ethanol locations) that filled at the high of the day. Looking back at the charts, the market gave us just a 25 second window to get this done! It underscores the importance of working with your Wheat Growers location or Grain Originator to identify those target areas and have the orders working when the market gives us those quick opportunities. Technical indicators are still bullish.
Soybeans: As of 7:30 up 15
The bean market was not immune to the sell-off yesterday, although nearby was not as weak as new crop months. Export sales showed continued demand for old crop at 164,000 tons and new crop sales of 444,000 tons. Total new crop sales are the largest ever for this date at 12 million metric tons! Illinois River bids were firmer again, with PNW values steady. Precip chances for the Eastern Cornbelt are seen as limited as seen in the 5 day rain forecast below.
Wheat: As of 7:30 Mpls & KC up 10
Hearing report of some HRW harvested in southern SD yesterday. Basis continues to firm as movement continues to be slow. Weekly export sales were good at 842,000 tons this week. The trade continues to downgrade world wheat production thoughts as conditions are monitored in China, the US, and the Black Sea region.
What to watch for: Crop Conditions on Monday, June 29th Stocks and Acreage Report, ability to test new highs on new crop months.