AFTERNOON GRAIN COMMENTS AND NIGHT TRADE OUTLOOK
by Duane Lowry
Thursday, June 7, 2012
Corn was well supported all day on bubbling weather concerns, as traders begin to recognize the troublesome past precip/two-week outlook combinations for too many acres. Expect technical and fundamental buying interest to surface on minor setbacks. Conditions are ripe for additional price strength.
Soybeans generated impressive gains on weather concerns and technical buying interest. Disappointing Bernanke comments were completely ignored by the weather-focused grain trade. We are poised for additional price strength. Seasonal highs are 60 cents away and may be the ultimate price target.
Wheat was clearly not the upside leader, but inter-market spreaders are reluctant to press wheat from the short side at current values. As corn continues to be supported by weather, wheat will dance along, with some potential of more aggressive short-covering activity developing during the next several days.
In summary, today's strength was all about weather, but technical conditions have been primed to be a supportive feature all week. Until we find a more confident expanding moisture outlook for a much broader portion of the US Midwest, prices will be well supported on minor setbacks and we seem capable of adding quite a bit of price premium to current values. At the time the grain settlements were being determined: Crude= up $0.08, Gold= down $42.90, Dow Index= up 92 and the US Dollar= down 23.
WEATHER: Midday forecasts were similar to this morning's discussions, with just too many US Midwest acres seeing limited precip opportunities during the next two weeks.
NEWS: China cut interest rates by 1/4%. The first cut in four years. Bernanke does not signal any imminent steps to help the economy, but will be prepared to do more if the economy worsens.
REPORT WATCH: *Export Sales data released at 7:30 this morning: Wheat= 325 tmt, vs estimates of 300-500 tmt, Corn= 284 tmt, vs 400-800 tmt, Soybeans= 418 tmt, vs 500-1000 tmt, Soymeal= 29 tmt, vs 50-175 tmt, Soyoil= 17 tmt, vs 5-20 tmt.
Thursday night's grain trade outlook: Support will be found under the market.
Potential buyers may be uncomfortable paying up until seeing the morning weather outlook. This may be a quiet session during much of the night. However, overall conditions seem very capable of pushing prices higher during the next several days.
Humor/Quote of the Day:
He (Bo Jackson) hit the ball so hard, I couldn't even turn around in time to see it go over the fence.
All ballplayers want to wind up their careers with the Cubs, Giants or Yankees. They just can't help it.
This newsletter is prepared from information believed to be reliable. Early Market News, Inc. does not guarantee that such information is accurate or complete and it should not be relied upon as such. Opinions expressed are subject to change without notice.