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"Be yourself; everyone else is already taken."
- Oscar Wilde
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Commentary |
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China is buying just as many beans at $17 a bushel as they did at $12. On Thursday, the USDA reported another strong week of soybean export sales, with new sales to China. Disclosed sales on Friday to Taiwan were another signal that record prices aren't deterring buyers from sourcing soy supplies. Unlike corn, there is no near-term substitute for soy protein, leaving soy consumers like poultry and hog feeders without any alternatives. Analysts are reducing their outlooks for crop potential following Pro Farmer's four-day, seven-state tour of corn and soy crops. The market was disappointed with the crop potential reported by Pro Farmer, as traders were under the assumption that August rains could help soybean yields.
The market is transitioning from supply concerns to demand issues, focusing on who can afford to buy corn above the $8/bu. level. That is the reason corn is not advancing above the August crop report highs. Demand is falling, but the catch is, is total production calculations really done falling to? How high abandonment for acreage is yet to be figured in. That has not been discussed enough in the market place. But whenever corn goes on sale, in comes the end-uesers. You don't ration a crop by putting it on sale.
Today's grain closes were pathetic and imply further downside potential. The US dollar chart below shows the US$ is at support and could bounce (negative to grain prices). With The FED meeting in Jackson Hole WY later this week, and it is an election year, any break in the dollar price will imply a QE of some fashion and that will reignite grain prices again to the upside on not supply/demand issues, but monetary concerns. Turn-around Tuesday will be watched for in grain prices.
US Dollar Daily Chart
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Corn |
Corn failed to encourage buying from the Pro Farmer Tour beyond the evening trade session and succumb to another round of profit taking and hedging. Today's close needs to find buying right out of the chute in the evening session or further erosion in price can occur back down to the 784-787 value. Strong buying interest should be seen there.
Dec Corn Intraday Chart
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Beans |
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Soybeans had seen new historical highs overnight before following corn weakness lower. 1705-1710 is light support, if that gives, the 1660-1670 area will be the quick downside target and buy zone.
Nov Bean Daily Chart
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Wheat
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Wheat has support at 860-870 that looks to be tested again. Seasonally, wheat prices advance from late August into October. If Russia does back out of the export scene in a couple of weeks, current weakness in price will be looked at as a buying opportunity. Add potential basis improvement into fall, holding harvested wheat that hasn't been sold yet should pay off.
Dec Wheat Daily Chart
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Live Cattle and Feeder Cattle |
Cash cattle trade was generally steady last week at 120-121. Choice beef is trading 192.50 and packer margins are $32 per head in the black. Everybody is squawking about the seasonal correction ahead of us for cash and beef prices, which typically occurs after Labor Day. It may or may not happen if and when everybody assumes. We've been talking about the bullish supply fundamentals as we get into next year. Keep in mind that the deferred futures are already pricing a lot of that into the market. Therefore, maintain a neutral stance for here and now. It's a relatively long time between now and next year, so you can almost be certain that the market will wreak havoc on both bulls and bears alike.
October Live Cattle Daily Chart
October Live Cattle Chart
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Gold
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We received our breakout above 1630 and gold is now on its way. 1700 should be achieved on this run higher.
December Gold Daily Chart
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Crude |
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It is interesting with all the media attention on Hurricane Isaac that oil had seen its best price last Thursday. Just like a freeze scare in the grains, the high comes before the freeze. Rumors of President BO opening up the strategic reserve is what put a washout in oil prices today. Hopefully it won't come to that as this hurricane is coming with a lot of bark, but probably will bite less. We will see and pray NO One gets hurt. Support is now at 92.00-92.50.
October Crude Oil Daily Chart
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08-28-12
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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.
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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.
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