Published Thursday morning, 9/27/12
What a difference a month makes, just 30 days ago the bean and corn markets were pushing near all-time highs with thoughts of another 10% surge, there wasn’t many anticipating that the 10% move would be lower. The seasonal tendency all points towards September being a dismal month to be long grains, but this year was different…right? Apparently not. So what does the market do from here?
The USDA will release its stocks figures tomorrow morning and most are expecting to see these as bearish figures as history has taught us that these reports tend not to be bullish. The corn is expecting to see a stocks figure over 1.1b bushels, beans are expecting 131m bushels and wheat is expecting a stocks figure of 2.278b bushels.
The harvest is now in full swing and corn is now on the back side of the mountain with expectations pushing over 60%, the yields reports for corn remain all over the map and seems that when it’s all done the yield will most likely fall a bit more, closer to 120. The beans on the other and are a different story, the yields continue to amazing even the farmers that are harvesting them with yields coming in 3-7 bushels better than what they had expected. The bottom line to all this chatter is that the production is better than what was estimated but the demand picture has been way understated and even with a 2-3 bushel increase the supply side will not change.
The weekly sales data continues to show that demand in the soy markets remains robust, the 799.0mt weekly sales along with another 110.0mt sold to China announced earlier this morning as the US already nearing 80% completed on sales with 47 weeks remaining.
The OI in corn fell by 4288, wheat is up 1273, beans are up 2576, meal is down 2212, and oil is down 2051.
The weather in SA has improved over the past few days but there are still pockets that are needing additional rain, temperatures have remained warm, it’s too early to be concerned yet but obviously with everything that took place this year it’s something that needs to be watched very closely.
The options in early trade this morning already have bid to them as trade prepares for tomorrow’s report; this is the typical pre-report trade.
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