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Closing Comments – 12/11/12

12/11/12 GLOBAL COMMODITY ANALYTICS & CONSULTING LLC

CLOSING GRAIN COMMENTS:

Mostly supportive corn and bean report numbers were strongly overshadowed
by bearish US and Global Wheat figures on USDA’s monthly supply‐demand
report released early on Tuesday morning, and as a result, wheat led the
row‐crop prices lower pretty much all of Tuesday’s session. In fact,
after Noontime weather models were released showing better chances for
heavier precip. In the southern plains this coming weekend, the Chicago
and KC Wheat pushed to lower lows on the session, with Tuesday’s price
action taking Chicago wheat to the lowest levels since early July.

Beans and corn were initially supported by a 10 Mln. reduction in US bean
ending stocks on USDA’s report, as well as new export sales of US beans
to China reported later on Tuesday morning. In addition to the stronger
bean fundamentals, USDA did not change any of the US corn supply‐demand
numbers on its report; the trade had likely been anticipating a
significant cut in exports but that didn’t materialize.… Continue reading

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Closing Comments – 12/10/12

12/10/12 GLOBAL COMMODITY ANALYTICS & CONSULTING LLC

CLOSING GRAIN COMMENTS:

Technically‐led and demand‐led liquidation continued to start the week in
the grain trade on Monday, with Friday’s move lower gaining momentum as
the USDA monthly supply‐demand report draws closer on early Tuesday
morning. The way we started the trading day in terms of the leader to the
downside, however, switched from corn to Chicago Wheat as the session
progressed—and this probably surprised some in the trade given the
supply‐demand fundamental differences between the two feed‐grains.

While the weekly corn export inspections came in at a dismal 7.8 Mln.
Bu., the wheat saw purchases from Saudi Arabia over the weekend and from
Egypt on Monday morning. In addition to this, Argentina’s wheat exports
may be cut due to a poor ongoing harvest in that country, and in addition
to this the weekend temperatures in the Hard Red Wheat Belt dipped into
the teens—causing understandable concerns regarding winter‐kill.… Continue reading

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Closing Comments – 12/07/12

12/7/12 GLOBAL COMMODITY ANALYTICS & CONSULTING LLC

CLOSING GRAIN COMMENTS:

Grains felt spillover pressure on Friday, as Thursday’s technically‐led
corn sell‐off continued and gained momentum; early in the Friday trading
session, lead‐month corn futures uncovered sell‐stops when it went
through the 40‐day Moving Avg. Weak demand and expectations for a
negative USDA supply‐demand report on Tuesday seemed to help push
technically‐inspired sellers to press the market down to levels not seen
in two weeks.

Even with another 115,000 sale of US beans to China announced by USDA on
Friday morning, the 2% lower move in corn had its negative effects on the
soy, as fund‐related profit‐taking was noted in this complex when corn
broke lower. This especially showed‐through in the meal market. Spreads
were also weak in the beans and given this, my expectations for a bean-led
turnaround into the closing bell dropped as the session wore‐on:
after all, why buy beans on good demand if spreads are weak?… Continue reading

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Antibiotics and livestock subject of broad NIAA dialogue

By Matt Reese

To build on the success of their first conference focused on antibiotics in 2011, the National Institute for Animal Agriculture hosted a second conference on the topic late last month in Columbus.

“A one health approach to antimicrobial use and resistance: A dialogue for a common purpose” presented a great forum for the symposium for a number of reasons.

“Columbus is an excellent choice for this. One of the main reasons for this is that we have seven health colleges here at Ohio State on one campus. There are no other universities that can say that,” said Leah Dorman, DVM, director of food programs, Center for Food and Animal Issues for the Ohio Farm Bureau Federation and symposium co-chair. “And, Lonnie King, who is the dean of the OSU veterinary school and the coordinator between these seven health colleges, is so knowledgeable in the topic of one health with antibiotics.”… Continue reading

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Comments at the Close – 12/6/12

12/6/12 GLOBAL COMMODITY ANALYTICS & CONSULTING LLC

CLOSING GRAIN COMMENTS:

The stronger price‐action and technically‐led rally on Wednesday was cutshort
Thursday by a corn‐led sell‐off as weekly export sales for corn in
the latest USDA report were barely over 1 Mln. Bu.—the lowest Net Sales
figure I can find since early September, and before that weekly sales
haven’t fallen this low since the Fall of 2008 based upon my research. By
Thursday’s close, Dec. corn was testing its 40‐day Moving Avg.

With the stunningly poor weekly corn export sales and also with Brazil’s
official crop agency, CONAB, releasing an updated bean production figure
of 80 and 83 Mln. Metric Tons, beans were not able to charge higher after
USDA reported much larger than expected weekly export sales in beans of
1.1 Mln. Metric Tons. In addition to this, soymeal weekly export sales
were 87% above the 4‐week average. As of this week, the YTD accumulated
bean export inspections are running just under 50% more than last year—
suggesting that at the current pace there is much more rationing which
needs to be accomplished before next spring.… Continue reading

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Comments at the Close – 12/03/12

12/3/12 GLOBAL COMMODITY ANALYTICS & CONSULTING LLC

CLOSING GRAIN COMMENTS:

Price‐action on Monday’s grain trade had a similar feel to it that we’ve
come to expect the past few weeks: stronger in the overnight and early
morning session, only to turn weaker after mid‐day trade with wheat and
corn leading the declines. The net effect of this mixed price‐action in
the feed‐grains was to see price swings of 25‐30 cents on the range of
trade.

Early strength was supported by fundamentals: for the beans, a saturated
Argentine growing region helped keep weather bulls in control early‐on,
as did talk that the strong basis at the Gulf of Mexico was probably due
to China increasing their buying of US beans in the past few days.

Helping the wheat was the fact that after Friday’s close, Egypt’s GASC
tendered for 400,000 tonnes of wheat, with the United States being
awarded 280,000 tonnes of the total.… Continue reading

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Comments at the close 11-3-12

Closing Grain Comments:

  • Heavy wheat deliveries and spill over weakness from poor weekly export sales from Thursday were the two primary factors helping to push the grains deep into the red on Friday’s trade—with Chicago Wheat leading the whole complex lower.
  • The near 3% losses in Chicago Wheat seemed to be mostly a result of the CME reporting deliveries double trade expectations, at 2119 contracts. There’s a catch to this, however; trade estimates were low because the CME made a reporting mistake that didn’t get updated until the Thursday evening night session—as a result, traders couldn’t update their estimates in time…making the actual deliveries look extra big. With this news, Chicago lead‐month wheat fell below $8.50 again, and helped push the KC lead‐month contract back below $9 during Friday’s early trade; even though weather reports for the southern plains during mid‐day continued to suggest above normal temps and below normal precip.
Continue reading

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Comments at the close 11/29/12

Closing Grain Comments:

  • Weaker weekly export sales reported by the USDA seemed to sink the 7‐day rally for the wheat on Thursday’s grain trade, as USDA reported weekly sales 27% below the 4‐week average. The export report helped take wheat from higher on the day to making new lows—with the Chicago market seeing a price swing of around 15 cents. Losses in the Chicago wheat were held in‐check, however, through Thursday’s close, as Kansas City Wheat Futures maintained limited losses. I suspect that the combination of the new Drought Monitor, coupled with a hot‐dry forecast for the southern plains in the latest 8‐14 day update from the National Weather Service, both helped to keep weather‐related risk premium in the KC market.
  • With weekly export sales 21% under their 4‐week average,the corn had no apparent problem following the wheat lower on Thursday…even though crude oil and gold were able to rally back on brand new speculation that the Federal Reserve is about to embark on a new QE4 policy…as reported by the Wall Street Journal.
Continue reading

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Comments at the Close – 11/28/12

11/28/12 GLOBAL COMMODITY ANALYTICS & CONSULTING LLC

CLOSING GRAIN COMMENTS:

Fiscal Cliff concerns and outside market volatility seemed to dominate
the grains on Wednesday’s trade, especially working‐on the trade
sentiment as the crude and gold markets lost between 1 and 1.5% on the
day‐trading session.

As a result, early losses in both equities and grains gave‐way to a midsession
turnaround in both: leading to another session of a wheat‐led
move higher in the feed‐grains, including the soymeal. For wheat,
Wednesday’s continued rally marks the 7th day in a row of a higher close
in Chicago Futures. And with the wheat supporting, corn was able to turn
positive as well.

While meal followed the other feed‐grains, the soy complex was a little
more hesitant to trade higher and instead seemed to play it safer by
working the bull‐spread instead of the flat‐price. Even though China
reportedly bought 200,000 tonnes of US Beans on Wednesday morning, this
didn’t seem to help the psychology much—maybe because this export
business was being rumored on Tuesday and had been partially factored‐in.… Continue reading

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Comments at the Close – 11/26/12

11/26/12 GLOBAL COMMODITY ANALYTICS & CONSULTING LLC

CLOSING GRAIN COMMENTS:

Two dominant themes seem to have directed price‐action in the grains
since traders returned from the Thanksgiving holiday weekend: first,
early session gains on problematic South American weather and more bean
oil sales being announced by Unknown Destinations gave‐way to and was
cut‐short by poor weekly export inspections heading across the board.
Wheat, corn, and beans all missed trade estimates on Monday morning’s
report, and ever since this report was released, corn and beans saw an
erosion of their gains to the point where corn was back to steady.

In the midst of this row‐crop price weakness, the other dominant theme of
the trade so far this Monday has been KC Wheat finding buying support and
garnering weather premium as crop condition in this afternoon’s weekly
report is expected to drop again and fall deeper into record poor
territory for this time of year.… Continue reading

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Mike Zuzolo’s Weekly Blog – 11/25/12

11/25/12   An Important Time Coming For Commodity Prices

 

Winter is fast-approaching, and with winter comes the winter marketing meetings; I’ve already scheduled some for Indiana and Kentucky at this point, and will be putting them on the website in the next few days under the Calendar Tab. Because of how I see the markets developing over the next 45 days, however, I am making a concerted effort to be in the office and as a result doing less marketing meetings. I feel very strongly as though the December-February time-frame are going to be a major part of our risk assessment for the 2013 marketing year. To compensate for doing less in-person meetings, I will, however, be adding more webinars to the website and also will be keeping-up the Audio Comments (which I’ve gotten very good reviews from you all so far). As this weekend’s update lays-out below, since having my own business going back to 2001, and doing independent analysis focused upon Inefficient Markets and a Value-Level Basis, the commodity markets—either cash or futures—usually give the risk manager opportunities to hedge their products based upon important drivers to the price and investment by fund-related actors: supply-demand fundamentals (Micro-Fundamentals), weather (Micro-Fundamentals), technicals, and currency/interest rate/international trade (Macro-Fundamentals).… Continue reading

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Ten cool Christmas gifts for farm folks

By Heather Hetterick, Ohio Ag Net

I like to give the special people in my life things they can actually use for the holidays. Since my family is involved in agriculture I have to be creative in my hunt for the perfect gift. Giving an item they’ll actual use that they wouldn’t buy themselves takes some thinking. Over the past year I’ve compiled this list to help you out this holiday season.

Here are some gift giving ideas for the rural residents in your life or maybe you’ll see something you need for yourself!

1. Weather Station

A handy tool for the house, office or shop, this weather station allows you to monitor the indoor and outdoor temperature, humidity, wind speed and direction along with barometric pressure and rain.

Model to Look For: AcuRite 01015 Wireless Weather Station with Wind and Rain Sensor.
Available at: acurite.com
Price: Sells for around $100.… Continue reading

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Comments at the Close – 11/21/12

11/21/12 GLOBAL COMMODITY ANALYTICS & CONSULTING LLC

CLOSING GRAIN COMMENTS:

The early session in grains brought with it new weekly highs in the soybean complex and firm price action in the corn, as the trade continued to see technically-related and weather-related buying. Trade expectations had also been increasing that China could be in for more US soy this week, and indeed, shortly after the day-session opened, China reportedly bought 20,000 tonnes of US bean oil as well as 120,000 tonnes of US beans. In addition to this, 56,000 tonnes of bean oil was bought by Unknown Destinations.

With this confirmation of Chinese buying, and with a cease-fire between Israel and Palestine pushing energy prices back lower on the day, grains saw profit-taking by Wednesday’s mid-session.

Weekly ethanol production numbers and stocks were negative and this seemed to push the corn back down below its 40-day Moving Avg.

Wheat was no help to the bull either on Wednesday, with Iraq reportedly buying 350,000 tonnes of Australian, Canadian, and Russian wheat, bulls didn’t seem to want to step-in and possibly buy due to the weather—especially given that Russia was part of the tender.… Continue reading

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Comments at the Close – 11/20/12

11/20/12 GLOBAL COMMODITY ANALYTICS & CONSULTING LLC

CLOSING GRAIN COMMENTS:

Weaker price‐action early in the trading session gave‐way to another
round of corn‐led short‐covering on Tuesday’s grain trade…this even
though outside markets were not supporting the trade like they were on
Monday’s session. It appeared to me as though the grain futures trade may
have hit a price level where feeding the bear is needed: in other words,
if the markets are going to go lower, fresh negative fundamental news may
be needed to cause sellers to step‐in at the current prices…especially
given that weather fundamentals both here in the US wheat belt as well as
South America are not seen as conducive to big crops as maybe the trade
was thinking a week or two ago.

Shortly after the day‐session opened, corn was able to reverse prices by
about 10 cents and help bring the beans back from 1% losses to 1% gains;
it seemed as though while corn started the turnaround, unlike Monday, the
soy complex was able to build upon that strength.… Continue reading

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Comments at the Close – 11/19/12

11/19/12 GLOBAL COMMODITY ANALYTICS & CONSULTING LLC

CLOSING GRAIN COMMENTS:

Short‐covering in the grains was the major feature most of the trading
day on Monday as bears from last week took some profits; an improved
“risk‐on” attitude in the outside markets, coupled with higher energy
prices due to increasing geo‐political tensions in the Middle East,
helped shift trade sentiment to a more positive stance as we started the
holiday week.

Somewhat surprising, the corn & bean oil were the leaders to the upside
on Monday: I suspect that new 2‐week highs in Malaysian Palm Oil on
Sunday night, combined with the fact that sharply higher energy markets
helping refinery margins for ethanol and bio‐diesel, were the drivers to
why these two lead Monday’s session.

And contrary to other fundamentals such as excellent soybean weekly
export inspections and yet another dry 10‐day forecast for the Hard Red
Winter Wheat Belt, the beans and wheat actually held‐back the corn from
making new highs heading into Monday’s close.… Continue reading

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Comments at the Close – 11/16/12

11/16/12 GLOBAL COMMODITY ANALYTICS & CONSULTING LLC

CLOSING GRAIN COMMENTS:

Ever since negative soybean export news was reported by newswires early
in the trading session, grains have tried to dig their way out of the
basement here to end the week. China reportedly cancelled 10 cargoes of
US beans booked for Dec‐Jan Delivery during the overnight trade on
Thursday night, 10 cargoes totaling about 600,000 tonnes. Newswire
reports suggest that this was on the heels of the sharp price decline of
the past three weeks since China likely bought these beans over a month
ago.

This negative export news, coupled with continued weakness in the outside
markets early in Friday morning’s session, helped push beans, corn, and
wheat to new major lows.

However, shortly before lunchtime in Chicago, news broke that the EPA
would not be changing the corn ethanol mandate; in addition to this,
updates coming out of Washington regarding the Fiscal Cliff seemed more
optimistic: these two fundamentals helped push the corn back to
positive, with beans and wheat also cutting their losses heading into the
last part of the trading session.… Continue reading

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Comments at the Close – 11/14/12

11/14/12 GLOBAL COMMODITY ANALYTICS & CONSULTING LLC

CLOSING GRAIN COMMENTS:

With surprisingly strong demand reports on several fronts, the soy
complex attempted to help turn the grain complex as a whole higher on
Tuesday’s trade. Not only did China purchase US soy and Unknown
Destinations purchase US bean‐oil, the October NOPA Crushing Report
showed a crush figure of 153.5 Mln. Bu.—the highest monthly crush since
January, 2010 and the 8th biggest crush on record based upon newswire
reports. The strong demand news for beans was contrasted with continued
beneficial growing weather for all three countries of South America’s
growing regions. The net‐result was speculators returning to the bullspread.

Keeping the beans from rallying too much, however, was a mixed wheat
market; while the Kansas City Futures were higher on worsening crop
conditions, the Chicago Wheat was pressured by newswires reporting fresh
Ukrainian wheat sales to Syria on Wednesday. Financial markets also
dropped to fresh 3‐month lows, and this seemed to keep some risk‐takers
in Chicago wheat on the sidelines as well.… Continue reading

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Comments at the Close – 11/13/12

11/13/12 GLOBAL COMMODITY ANALYTICS & CONSULTING LLC

CLOSING GRAIN COMMENTS:

Grains tried to find price support during the early part of the trading
session on Tuesday, with short‐covering initially helping push prices
positive on the session. However, in the late‐morning trade, wheat began
to find new daily lows, and then new 3‐week lows, with December Futures
in Chicago moving down to test the mid‐October low of the $8.40 area.

Weekly export inspections probably had quite a bit to do with the selling
pressure that took place early in Tuesday’s session: wheat exports of
10.4 Mln. Bu. were 25% less than last week and corn exports were a
whopping 9.4 Mln. Bu., nearly 40% less than last week and 75% less than a
year ago. This likely set the trade up for another round of long
liquidation by short‐term bulls when the exports came out disappointing
for the feed‐grains.

Beans had a different look to them on Tuesday; the trade seemed to refocus
its attention on the fundamentals more and as a result, the bullspread
was once again back in‐favor by speculators.… Continue reading

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Alabama’s Randy Owen at home in the cattle business

Did you know George Strait has a degree in Agricultural Education? Brantley Gilbert showed hogs at the fair. Luke Bryan grew up on a peanut farm in Georgia and worked in his dads fertilizer business before heading to Nashville.

Many country music artist sing about farming, but few actually have real farm experience.

I knew the members of the group Alabama had grown up in cotton country, but was surprised to learn Randy Owens, the lead singer of Alabama not only owns Tennessee River Music Herefords and Angus, but has been actively involved in the cattle industry his whole life.

Owen’s farm is located in Ft. Payne, Alabama where he grew up.  It’s a 3,000 acre operation that  consist of 500-head of Hereford and Angus cattle. Much of land that he owns  and is now part of the farm was sharecropped and rented by his family for row crops.

The name of the farm comes from Alabama’s first number one single, Tennessee River Music.… Continue reading

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