"Finish each day and be done with it. You have done what you could. Some blunders and absurdities no doubt crept in; forget them as soon as you can. Tomorrow is a new day. You shall begin it serenely and with too high a spirit to be encumbered with your old nonsense."

Ralph Waldo Emerson

The talk early this morning was about a coalition of livestock and poultry producers petitioning for a waiver of the Renewable Fuel Standard. That failed to spark much of any kind of a sell off as it was reputed by the Renewable Fuels Assn. with the following comments. :??

"Given the flexibilities inherent to the RFS, and the fact that waiving the program would not result in any meaningful impacts on corn prices, we fully expect Administrator Jackson to deny any waiver request," said Bob Dinneen, RFA president and CEO. "A dispassionate review of the facts can lead to only one conclusion: a waiver of the RFS would simply reward oil companies that have long sought to repeal this very important and successful program. The RFS has reduced our dependence on imported oil and saved consumers at the pump."??

Still, despite the downturn in production and continued demand rationing by the ethanol industry, obligated parties (petroleum refiners and blenders) should have no problem meeting the RFS. The ability of obligated parties to "bank" excess Renewable Identification Number (RIN) credits and use them for compliance in the following year provides a significant measure of flexibility that takes pressure off of the corn market in the event of a short crop. It is estimated that some 2.4 to 2.6 billion excess renewable fuel RIN credits are currently available to obligated parties, equivalent to nearly 20 percent of this year's RFS renewable fuel requirement.??The program's flexibility also means that waiving the RFS would not have a meaningful impact on corn prices. A recent analysis by Professor Bruce Babcock at Iowa State University simulated the corn price impacts of a 100% waiver of the RFS during the upcoming 2012/13 corn marketing year, finding that a waiver might result in only a 4.6% reduction in corn prices.??Professor Babcock concluded that, "The desire by livestock groups to see additional flexibility in ethanol mandates may not result in as large a drop in feed costs as hoped." He further found, "...the flexibility built into the Renewable Fuels Standard allowing obligated parties to carry over blending credits (RINs) from previous years significantly lowers the economic impacts of a short crop, because it introduces flexibility into the mandate."??

Weekend weather was within expectations as some rain occurred, but more areas were dry than wet. Looking ahead, temperatures should be warmer to much warmer than usual over the next 10 days, with scattered areas of rain occurring over the next 10 days, but overall below-average rainfall is expected. The highest overall chance for rain is Friday-Saturday as a cool front moves eastward. Over the last 30 days, 59% of projected US corn production and 55% of projected soybean production received less than half their average rainfall. Only 4% of projected corn and 5% of projected soybean production was wetter than average within the last 30 days as June-July rainfall and July temperatures will rank within the 10 driest-warmest for only the second time in 118 years. The only question now is that whether or not the market has adequately factored in the damage? With the sun now setting earlier and rising later every day, this week's central US temperatures look to average only 4-6 degrees above normal, with the extreme heat of early and mid July no longer evident. The 2012 central US drought has hit its zenith in terms of harshness, but is far from completely over.

Traders are looking for a 1-3% decline in corn ratings while soybean ratings should be steady to 1% lower. With last Monday being the exception, the grain markets have seen much of their strength on Mon/Tues before consolidating and/or turning lower later in the week.

The Fed is meeting this week Tuesday and Wednesday and it is the first of the month effect where the US dollar turns. Look for a turn in the US dollar this week, likely back to the upside. Does that mean grains will notice that and sell off again this week?





US Dollar Daily Chart

Corn has cracked through 8.00 and that should now become support. I have shown in the past where targets for the upside, which include measuring the July 4^th gap, point to 8.50 up to 9.35. If corn has a turn-around-Tuesday, it should find support at 798-805. Corn should not close back below 8.00 for two days in a row if it has truly broken out to new historical highs.

Dec Corn Daily Chart

Soybeans have bounced 1.00 off of its lows from last week, but are trailing the corn concern. Soybeans made their highs early last night, and during the whole day session today could only take that high out by a penny and stay there for 10 seconds. That tells me we will have a Turn-around-Tuesday in beans. Be careful here, The Sunday night gap under 1620 could get tested.

 

Nov Bean Daily Chart

Wheat

 Wheat is losing ground to corn, as the spread between the two narrow. The market is giving in to the reality more will be feed. If corn hits 8.50, then based off of current trading, wheat will just be doing a double top at 9.50. Be very careful with month end trading tomorrow.

Chicago Wheat Daily Chart

  August Live Cattle Daily Chart

Feeder Cattle Monthly Chart

Gold

We are rolling to the December gold contract. This contract should be able to test 1645-1650 this week.

December Gold Daily Chart

 

Oil is getting close to big resistance at what would now be 92.00-93.00. The US dollar should turn higher this week, and that should do what? Turn oil back lower. You should be able to sell resistance with a buy 94.25 stop.

 

                                              September Crude Oil Daily Chart

07-30-12

NOTE: With the exception of livestock, all trades will be entered in the electronic markets unless otherwise noted. Hedge recommendations and Trade recommendations are totally separate, and may sometimes conflict with one another. It is strongly suggested that Spec trades and Hedge trades be done in separate accounts.   Heartland Advantage Ask about our State-of-the-art order entry software with LIVE quotes and charts! Free to all active clients of Heartland Investor Capital Management, Inc. A word to the Wise                             Past performance is not indicative of future results. The information contained in this report is intended for informational purposes only and is the opinion of the writer and may change at any time. This information was compiled from sources believed to be reliable to Heartland Investor Capital Management , Inc. but accuracy cannot be and is not guaranteed. There is no warranty, expressed or implied, in regards to this information for any particular purpose. There is SIGNIFICANT RISK of LOSS involved in trading futures and / or options on futures and may not be suitable for all investors. Investors should consider these RISKS and evaluate their suitability based on their financial conditions. No one should ever consider trading futures or options on futures with anything other than RISK CAPITAL . NO LIABILITY  on the part of the author exists for any trading loss you may incur in the use of this information. The information contained in this newsletter is privileged, confidential and protected from disclosure. Any further disclosure or use, distribution, dissemination or copying of this message or any attachment is strictly prohibited. Newsletter provided by Heartland Investor Capital Management, Inc. a registered CTA with the NFA, of which Eugene Graner is principal. This entity is a separate legal entity from the Introducing Broker Heartland Investor Services.

www.heartlandinvest.com |

Copyright © 2012 Heartland Investor Capital Management All rights reserved