On farm storage key for old-crop marketing strategy
Precipitation is forecasted to favor the central to south Midwest, while temperatures are not expected to be extreme enough to threaten cornpollination this week.
Short Term Grain Weather Focus: According to World Weather Inc, the 7 day precip totals favor eastern IA though PA the greatest with ND, SD and northern MN with little to none. Dry, warm weather is intensifying in the northern Plains and Canadian Prairies, as is Western Australia wheat country is becoming much more serious as well as well as dry weather developments in Poland to Germany, Ukraine, Argentina. Improving conditions can be found in China, India and Mexico.
Friday's 6 to 10 day forecast is forecasting warm temps mainly north central and above normal precip east Corn Belt, normal from MN down to MO into west TN and below ave far west Corn Belt. The two week forecast (we do not place much confidence in any summer forecast beyond 5 days) suggest no dry weather conditions for the majority of the west Corn Belt with similar above normal temps in the north central region. The warmer than normal weather is needed in WI and MI to reduce potential for a early frost.
Corn Fundamentals: Fundamentals remain bullish for corn with technicals restricting futures potential movement for the moment. The fact that wheat is struggling with 2006 production is viewed as strong underlying support. Weekly export sales were solid but shipments are showing signs of slowing. This is likely to add to old crop end stocks with only 7 weeks remaining in the marketing year. Asian corn buyers are buying for October shipments. We anticipate old crop basis to weaken further the closer we draw to the middle of August. Any old crop sales needed to be made to make room for new crop supplies need to be made now if you have not already done so by following our cash marketing advice.
July 12th: USDA is scheduled to release its July World Ag Supply Demand report next Wednesday. Allendale has posted its production as well as end stocks for domestic old and new crop as well as world estimate. Given the crop conditions, we have raised the yield estimate within what we suggest is a reasonable amount USDA could match. Trade ranges and averages have been added today.
Technicals: Sept futures have chart gaps of 2470-2476 with another 2414 to 2430 as a potential target. 2550 if offering solid resistance and it may take forecast of intense heat and dry weather for the west of over 7 to 10 days for the price level to be cracked. Weekly and monthly charts do show 2600 as very stout resistance. Dec corn futures are range bound between 38% to 62% retracement values. 2672 resistance has been broken with a move to 2750 now suggested and a place to catch up on new crop hedging with at the money calls attached when the hedge is placed.
Historical Price Trend Page: good odds next week for wheat and cattle. Cattle futures on ave have 2 to 1 reward to risk, wheat ave gain to losses are nearly neutral.