Posted: Wednesday, August 28, 2013 4:11 pm | Updated: 4:33 pm, Wed Aug 28, 2013.
CME Group and Brugler Marketing
Fresh new crop demand helped to spark a rally for the soybean market today but traders were still cautious ahead of the weekend given the forecast that calls for a better chance for rainfall into next week, the CME Group said in its Wednesday afternoon report.
Corn futures had a tough time shaking off the sharply lower action from yesterday and traded lower throughout the session. The technical chart is beginning to turn lower which has eroded bullish momentum but the forecast for the remainder of the week certainly suggests yields will be trimmed in many key growing states, the CME said.
CORN: The high heat seen this week is occurring post-pollination which is the most important influence on yield potential but August has been very dry which has helped ratchet back thoughts of record yields for some states. A noted commodity weather analyst cut its yield forecast 1% from July to 158.1 bushels per acre which is still near trend, CME analysts said. Yield forecasts remain highly variable across the market.
Basis bids in the west remain extremely firm with reports of $2 over the September trading. Ethanol demand is strong while supply is thin, the CME said. Ethanol production for the week ending August 23th averaged 820,000 barrels per day. This is down 2.8% vs. last week and up 0.12% vs. last year. Corn used in last week's production is estimated at 86.1 M/bu. and cumulative usage for this crop year is 4.44 B/bu.. Corn use needs to average 186.02 M/bu. per week to meet this crop year's USDA estimate of 4.65 B/bu.. Stocks as of August 23rd were 16.25 M/barrels, down 1.4% vs. last week and down 12.1% vs. last year.
SOYBEANS: Old vs. new crop spreads were at it again to the upside with cash basis levels holding above delivery values as the market approaches first notice day for the September option, the CME said.