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Morning Grain Market Research


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Bulls evidently had a little unfinished business from Friday as grain and soy markets gapped higher overnight as we began to trade for this new week. It appears though that once that was taken care of, there was little left to attract additional interest, and prices then turned lower into the morning break. This is the challenge of a weather-driven market, and we live and die by each updated forecast and the latest runs this morning are calling for a weakening of the high-pressure ridge. I remained mostly confined to Northern Illinois and bit if Southern Wisconsin throughout the weekend and witnessed everything from corn that appears quite healthy and is beginning to tassel to the latest planted corn that is barely a foot tall with leaving curled tight trying to protect itself from the extreme heat, with the majority laying somewhere in between these extremes. It is still tough to make much of an assessment of beans as they are all small, but that said, I have not seen this poor of a looking stand in many years. I have to travel across Northern Indiana tomorrow, and into areas, I have not visited this year so it will be interesting to see what I find.

Two items of interest from China over the weekend that once again reflect the impact that the African Swine Fever has created. In the weekly state reserve auction, 1,643 MT of beans were sold, which amounted to just 1.2% of the total offered this week. The second item was even more telling as Cargill announced that they are closing several feed mills that they operate in that country and state they have no plans ever to reopen them. The Chinese government reports that total pork production was down 5.5% for the first have over the year, which would not seem to jive very well with information we have about the mass liquidation of herds. I suppose though, if they are looking only at slaughter numbers, that may be feasible as it is my understanding that when the disease was found, the entire farm went to the packing house. As I have commented previously, the (supply) problems should really surface in the latter half of the year.

ProAgro, a private consultant group in Ukraine, has bumped up its projection for grain production in that nation, moving it from 71.3 MMT to 72.55 MMT. This is broken down with 34.5 MMT corn, 27.4 MMT of wheat and 8.37 MMT of barley. They peg the sunseed crop at 14.33 MMT and rapeseed at 3.58 MMT.

Macros are providing nothing more than a mixed influence to begin the week. Metals are bit higher as is crude oil but so are equities and the U.S. Dollar.

We shall have to see if the midday weather run provides any changes, but I suspect the majority of the focus for the balance of the day will be directed at the weekly condition updates this afternoon. While we should recognize at this stage, it is primarily a greenness update; they can still inject a little extra volatility into the trade for a few hours.

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About the author


Dan Hueber is the General Manager of The Hueber Report.  Mr. Hueber literally grew up in the grain industry, and entered the commodity futures and options business more than 35 years ago.  

Mr. Hueber’s methodology combines his deep understanding of fundamental data, various technical indicators, and his studies of Gann and Elliot Wave Theories.  You can find out more about him and sign up for our newsletter at www.thehueberreport.com.

Dan can be reached at dan.hueber@cgb.com

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