07-25-2013 07:40 AM - edited 07-25-2013 11:09 AM
11 states seen having below trendline average corn yields.
The Sept. futures corn contract is 14 cents lower at $4.94. New-crop Dec. corn futures are 4 cents lower at $4.76. The Aug. soybean futures contract is trading 29 cents lower at $13.63, new-crop Nov. soybeans are trading 36 cents lower at $12.22. Sept. wheat futures are trading 4 cents lower at $6.49 per bushel. The Dec. soymeal futures are trading $16.30 per short ton lower at $364.20, while old-crop August is down the $20.00 daily limit. Dec. soyoil futures are trading $0.24 lower at $43.87.
In the outside markets, the NYMEX crude oil is $0.09 per barrel higher, the dollar is lower and the Dow Jones Industrials are 67 points lower.
Mike North, Senior Risk Advisor for First Capital Ag, says the futures are responding to a cash collapse "Basis markets continue to collapse. Beans led the charge on Tuesday, as basis levels dropped more than a dollar from the evening before. Corn follows today, as cash bids drop 75 cents from yesterday along the river and among processors. As the southern harvest progresses, weather concerns ease, and buyers comfort with existing supplies grows, prices are in jeopardy. This will be led by old crop markets. Those spreads will be unwound and the premium in old crop prices will come into closer alignment with new crop values. It is the 'perfect storm' that grain producers have feared and buyers have hoped for."
At the open:
The Sept. futures corn contract is 5 cents lower at $5.03. New-crop Dec. corn futures are 3 cents lower at $4.77. The Aug. soybean futures contract is trading 29 cents lower at $13.63, new-crop Nov. soybeans are trading 19 cents lower at $12.37. Sept. wheat futures are trading 2 cents lower at $6.51 per bushel. The Dec. soymeal futures are trading $7.40 per short ton lower at $373.20.
In the outside markets, the NYMEX crude oil is $0.09 per barrel higher, the dollar is higher and the Dow Jones Industrials are 22 points lower.
USDA Weekly Export Sales Report Thursday shows wheat, soybean and soymeal beat:
Wheat= 661,400 mt vs. the trade expectations of 400,000-600,000 metric tons.
Corn= 488,000 mt vs. the trade's expectations of 600,000-950,000 mts.
Soybeans = 793,500 mt vs. the trade's expectations of between 300,000-650,000 mts.
Soybean meal= 329,600 mt vs. the trade's expectations of 35,000-150,000 metric tons.
Early calls: Corn is seen 4-6 cents lower (old-crop), soybeans 35-40 cents lower (old-crop), and wheat 2-4 cents lower. Meanwhile, new-crop corn 2-4 cents lower and soybeans are seen 20-21 cents lower.
Overnight grain, soybean markets=Trading lower.
Crude Oil=$0.09 per barrel higher.
Wall Street=Seen lower, as China's slowing economy concerns global markets. Plus, U.S. Durable Goods Report beat, but Jobless Claims edged higher.
World=Asia/Pacific stocks were lower and Europe's stocks are lower.
More in a minute,
07-25-2013 07:48 AM
I don't know about any possible explanation. But there are no reports about significant damages in Brazilian crops.
What I can say also right now is that economy is being destroyed in the country. Major sectors like the oil industry, mining and even car manufacturing have slowed down or are already in a recession. Agriculture tends to increase its role in the Brazilian economy. In June, unemployment jumped from five to six percent...And just jobs in the field have registered a surplus. Tough times ahead.
07-25-2013 07:49 AM
07-25-2013 07:54 AM
You're right. The processors have figured out that they can make it to the new crop. For corn and soybeans, it's a ll about the weather. In the next 10-days, Iowa has a shot at three different rain events.
07-25-2013 07:57 AM
07-25-2013 08:15 AM
is likely more of an October harvest than the normal September.
The seasonal new crop cash market effect is generally a lower Sept market following the seasonal higher August market.
Mike, it's interesting the processors supposedly have things " figured " out in July this year. LOL
07-25-2013 08:27 AM
I've said for a while that this market wants to go down. I got out of my bean contracts this morning. Considering what is happening in the bean market, it is somewhat surprising that corn is holding on this strong.
We came back to Cannon Falls, MN for a couple of days. Don't need to mow lawn - the lawn is brown. Need to water the apple tress though because they are starting to abort the apples. We have a chance of getting rain today, but these still look like hit or miss showers. I got a chance to watch the weather channel a bit this morning. By looking at that it would appear that we are in for a bunch of rain and heavy weather today. It doesn't look like the event in the Northern corn belt will be as widespread and active as the weather channel made it look to be, but they tend to exagerate all sides of the weather anyway. A couple small fronts over the course of the next week, much the same as we've seen. Hit and miss stuff. That low pressure system for next week that develops in the OK, TX panhandles is getting more interesting, and looks to be getting to be a better possibility and a stronger system. This would be one of the first in a long time that actually came from the SW into the corn belt instead of this stuff dropping out of Canada like we have seen. If it continues to develop, it would give the possibility of some good rains on a line from the OK panhandle to WI.
From the cash market side, I still have a few thousand bushels of corn and beans to sell, maybe 10% of last years crop. I still plan to sell the remainder in 3 weeks before my auction. What happens, happens.