Ag Closing Comments for 09/02/10
Cattle:
Strong gains on reported fund buying and a supposed optimistic outlook for cash cattle next week.. While it seems fill-in-the-blanks justification, the talk is that beef demand will be so good over the weekend that retailers will rush to book large quantities of product.
More reasonable perhaps underlying support came from the psychology of higher beef midday and what was construed as good economic reports (hey, good news: unemployment claims dropped 6,000 from the previous week; the bad
news:new unemployment claims still at 472,000hd. And as mentioned, that restaurant performance index fell again suggesting meat demand could be limp. I will note weekly beef export sales better than expected, led by Japan, last week.
Hogs:
Strong gains here also on reported fund buying for much the same reasons as the cattle rally (especially that filler of heavy retail re-filling). Additionally, October finally surmounted its various m/a resistance and attracted a bit more buying. Cash hogs were mostly lower, interior rough avg. $76.75; pork midday had hams up 4 (on 6 loads, only 1 was for exports), the rest largely unquoted.
Corn:
Modest gains in a two-way, choppy trade. While recent private crop estimates were supportive and while weekly export sales remain large, perhaps the record large fund longs are enough for awhile and keeping new buying modest (4,000 today). Argentina Cereals Exchange says planted area will rise 9% on yr.
Soybeans:
Once more, November holds $10.00 area and mounts a modest rally in the close. Bean ylds. seen not as severaly lowed as corn and concern over China buying decreasing (see pre-opening export sales) lessened U.S. beans has kept the rallies in check. Funds did buy a reported 3,000.
Wheat:
Modest gains as once again prices slip significantly from early highs. Why? For me because funds only bought 3,000 net and indicates funds are not ready to commit large amounts back to the long side. That might indicate they believe the rally has ran its course at past highs (and, if one so inclined, covered all the current sins of the world crops). 4 or 5 weeks ago word Argentina got large area rain coverage except the west farm belt the market would have focused on the latter, rather than the former; that Russia's Putin said new exports will be banned until after the NEXT grain harvest fell to the wayside to a degree on talk it was purely to prevent hoarding and speculative hoarding.
Support though also came from another week of large weekly export sales and that the Decembet can hold $7.00 for now.
