Morning Grain Comments
09.10.2010
By Karl Setzer, CTA
Friday, September 10th, 2010
Grains were narrowly mixed overnight in final pre-report positioning.
Basis levels are not deteriorating as much as expected in the South, even though harvest is in full swing. Buyers continue to push for deliveries of higher quality new crop grain that they can blend with old crop. This is more of a case for corn, as the condition of that crop in storage continues to decline. Buyers claim they need to push for early harvested corn for blending so they can more the corn into the export market and take delivery of later harvested grain.
There are some concerns starting to develop with new crop grain quality though, mainly soybeans. Several terminals claim they are receiving elevated volumes of green soybeans, which lowers the grain’s value. Green soybeans are caused by improper maturity, and this year is the result of soybeans dying from drought conditions. The problem with green soybeans is the color of the oil from them will also be green, making it unusable for food grade purposes.
The primary story in today’s session will likely be the release of the monthly supply and demand report from the U.S.D.A. Historically this report carries little weight in the market as trade is more interested in actual yield data than estimates. This year may be different however, as the rapid maturity of the crops may give a much more clear indication of true yields and crop size. The market is also starved for fresh fundamental news, which will give the report more attention.
Market Movers: U.S.D.A. Reports, Harvest Activity
Early Call: Subject to U.S.D.A. numbers at 7:30.
For more information, you may contact Karl Setzer at 1-800-383-0003, extension 237, or e-mail at ksetzer@maxyieldcooperative.com. The opinions and views expressed in this commentary are solely those of Karl Setzer. Data used in writing this commentary obtained from various sources believed to be accurate. This commentary is intended for informational purposes only and is not intended for developing specific commodity trading strategies. Any and all risk involved with commodity trading should be determined before establishing a futures position. Please visit our Risk Disclosure Page for more information on commodity trading.
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