AM Comments 07/02/14
Wednesday, July 2, 2014, 7:07 AM
Submitted by: Dustin Weiner
We are seeing mixed markets this morning with soybeans (mainly old crop) trying to firm up a bit while corn & wheat futures are drifting lower. Also the trade feels like it could be a little thin today -- the market is only open until noon tomorrow and is closed on Friday (4th of July holiday).
Most of the talk coming from market analysts still centers around the aftermath from Monday’s USDA report. The cash market has gone quiet ever since the report came out, producers seemed to have shut off all selling (not surprising with the big drop in prices). On the flip-side end-users in both corn and soybeans are staring at positive margins wondering what to do. How will that play out over the next three months as old crop supplies feel tight (especially soybeans) while new crop supply projections remain excellent???
Currently the end-user strategy looks to be a “hand-to-mouth” mentality – meaning they will do their best not to get overly long on old crop supplies, instead buying them in shortened periods (at profitable levels) to minimize risk. In other words, spot/nearby bids will remain the best bids. If a producer has grain at home on the farm that he/she is unwilling to sell today, taking it into an FC location and putting it on free price later may be the right thing to do. Why? When delivery windows start to shrink, the flexibility to sell a spot or quick ship bid may prove extremely valuable.
Corn 2 to 3 cents lower
Soybeans 2c lower to 2c higher
Have a great day!