Nov Canola 2013

[errolanderson]

Realize this is looking way ahead of the
cart but . . . .

Nov 2013 canola is currently trading
above $530/MT. Given market volatility,
a move toward $540 . . $550/MT
certainly possible. But strength in the
next crop year has been garnered to some
degree by the current U.S. drought.

With the U.S. weather market now getting
long-in-the-tooth plus uneasy global veg
oil markets, this contract may be worthy
of a watch.

Added market tidbits this morning . . .

U.S. 2nd quarter GDP came out at 1.5%,
with the consensus at 1.3%, so better
than expected, but below the 1st quarter
GDP of 2.4%. U.S. economy continues to
slow.

Of note . . . U.S. corn exports were
actually negative last week. More export
cancellations.

Errol

[TOM4CWB]

Dear Errol,

I am surprised that as a technical guy... you are actually talking about selling now, after this pull back.

Dec 12 Corn will very likely go to at least 160 percent of the April price... or $8.72... it has only got to $8. Stocks Use 7.2 percent is very low.... lowest since 95-96... the actual carry over is close to 1974 which was 484 million bu... this year projected to be 503mb. THIS is projected to be the worst drought since 1934.

If it were me.... I would wait for a better time to sell... this pull back was both healthy and totally expected... to be part of a healthy up market.

[errolanderson]

Tom . . . you have strong advice. My
feeling it's time to keep an eye on 2013
production. Without this current drought,
Nov 2013 wouldn't be this high right now.

Next year may be a totally different beast
marketwise. And the world may be quite a
different place as well.

[TOM4CWB]

errol,

Corn is a big driver of this market.

We just finished a bullish week:

" As Friday progresses December corn is in position to completely erase its early losses and possibly close higher for the week.

Friday 07/27/12
Dec Corn Roulette
Darin Newsom DTN Senior Analyst

"Source: DTN ProphetXWhat does all that mean? First, the low of $7.45 1/2 closed an upside gap from last week's low of $7.49 1/4 to the previous week's high of $7.49. This eliminated a potential island top formation, at least for now. Second, if the contract were to come back and close above last week's settlement of $7.95 3/4 it would establish a bullish outside week, a possible trigger for more noncommercial buying interest next week."

This may mean nothing... as past technicals are prone to new market trading hours etc. A week is like a day... with trading that almost does not stop with night trading.

For marketing ideas on technicals read the whole article on DTN... this is a very volitile time.

If I were pricing 2013... I would want a home for it...

[Digger]

and the rest of teh story/article...

On the other hand if December corn closes below last week's settlement price, even if by a quarter of a cent ($7.95 ½ or less), then by definition the contract has established a bearish reversal week. Some would call it a bearish key reversal week. If so the contract could be viewed as having established a near-term top.

There are a couple of things to remember: One - the market remains fundamentally bullish. While the December to March spread has seen a weakening inverse this week (third study, green line), the bottom line is it remains in an inverse which indicates a bullish longer-term commercial outlook. Two - the changed dynamics of the markets since 2005 have wreaked havoc on traditional chart patterns. A look back at charts over the last few years shows a number of such signals that didn't pan out well.

Nevertheless, the Dec corn contract should hold trader's attention as it makes its way toward Friday's close.

---------------------------------------

For the record December corn closed today at $7.93 ¼.

[TOM4CWB]

Digger,

Bryce Anderson DTN Ag Meteorologist and DTN Analyst

"More Drought Impact On Projections
This year's tremendous drought--whether it's a flash drought or not (as has been discussed in lively fashion on this blog site)--has again brought on a reduction in crop forecasts. This time, the widely-followed Informa Economics group in Memphis, TN has made another cut in its crop forecasts.

Informa has pulled its corn crop projection for the end of August time frame back below the 12-billion bushel figure to 11.5 billion bushels. This is 1 billion less than Informa's outlook in July because of a lower harvested acreage figure and reduced yields. Informa looks for corn harvested area to be 85.67 million acres--down 2 million from Informa's projection July 13, and 3.2 million less than USDA's estimate in June. Corn yield is pegged at 134 bushels an acre, down 8.5 bushels from Informa's previous forecast.

On soybeans, the Memphis group projects end-of-August soybean production at 2.9 billion bushels, down 122 million from the mid July forecast. This projection is based on yields of 38.5 bushels per acres and a harvested area of 75.1 million acres, down 250,000 from USDA's late June estimate.

The Informa mid-July projection was based on an assumption that August weather would be normal. But the group has changed its tune, and adjusted the corn and soybean production levels to reflect an assumption now that August weather will continue to be stressful--just like we have seen so far this season. Included in the Informa assumptions are the expectation that August rainfall will be on average about half of normal, with temperatures on the order of 3 degrees Fahrenheit above normal.

July temperatures have AVERAGED 5 to 10 degrees F above normal. And, of course, precipitation has been well below average during July, which has brought on crop conditions of nearly half the corn and a third of the soybeans rated in poor to very poor condition.

Bryce

Follow me on Twitter @BAndersonDTN."

[TOM4CWB]

I Note:

It's Your Business

By Dwayne Klassen, Commodity News Services Canada

WINNIPEG - July 26, 2012 ...
In part the report says...

"Old crop soybean stocks are already on the tight side, and
with the weather threatening to reduce new crop production, the
need to ration demand has never been greater. There are already
ideas that soybean values could move significantly higher yet
if the yields are indeed reduced and demand fails to decline.
There were ideas making the rounds that Brazil`s soybean
crop was so small that they have had to begin importing the
crop from Argentina. The thinking is that its only a matter of
time before Brazilian end-users start looking at US soybean
stocks to cover immediate needs. This would only put further
upward pressure on prices."

[mcfarms]

Lets put it this way

Anyone who wants to sell right now don't call the elevator , call me I'll take every bushel.

[mcfarms]

Anyone? anyone? Bueller? Bueller? Anderson?

I didn't think so.