PM_Afternoon_118 by khalifa20

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									                                                                       Afternoon Market Comments
                                                                                   Wednesday, August 08, 2012
Highlights:
Grain markets rebounded, after early session weakness, to close higher on the day. Old crop months led the gains. Volumes
were reported as light to moderate through most of the session. Index rolling was noted. Your sweat glands were right. The
lower 48 states just experienced the hottest month (July) ever recorded, says NOAA, breaking records set back in 1936.

Corn:
Futures recovered after overnight and early day session weakness to close stronger. Corn spreads reversed course today after
nearly 2 weeks of consistent weakening. CZ12 last trade today was $8.16 1/4c. The CZ/CH spread moved back to an inverse
today, last trading at a 3 1/4c inverse. CZ13 last trade $6.47.

 Corn belt rains are still forecasted over the next 72 hours for most of the corn belt states, sans Nebraska.
 The USDA crop report on Friday will address three key items for the trade. Most closely anticipated will be the calculated
     yield figure released, followed closely by current and future carryout calculations. Demand estimates may change also.
    The Pro Farmer crop tour kicks off next Monday and will try and ascertain a yield calculation as part of the tour.
    Corn spreads roared back in today, fueled by outright buying of the CZ. Today was day #2 of the Goldman roll.
    Corn basis was generally weaker again today with a smattering of bids bidding against the CZ. FND for CU12 is 8/31.
    The U/Z settled near a 6 cent carry and Z/H settled near a 3 cent inverse. CZ12/CN13 closed near a 15c inverse.

Oilseeds:
Soybeans rebound to close 15 to 25c higher, led by the spot SQ12 contract. SX closed at $15.81 1/4 , up over 15c. The SX/SF
reversed recent course today, closing at a 7 3/4c inverse. SQ12 traded the strongest, closing up 24 3/4c.

 Interesting to note, that even with the average yield guess near 37.5 bpa for Friday’s report, subsequent yield estimates tend
  to go down further in years such as this. Harvested acres are expected to decline also.
 Brazilian boat lineups remain deep but more so a function of loading delays than anything else.
 CIF bean basis improved again today, while interior values struggled and were generally weaker.
 Spreads snap back into inverse mode today, led by the spot month August contract. See CIF basis for clues.

Wheat:
Wheat futures would not be left out of the act, closing 5-10c higher in the 3 major wheat markets. Futures gains were led by the
old crop months and correspondingly wheat spreads tightened today.

 Wire stories of feed wheat transactions continue to make news as feed makers cut cost. High corn prices can do that.
 The much awaited Russian wheat export decision yields little change. There are no plans for restricting grain exports, how-
     ever the Russian Deputy Prime Minister did not rule out “protective export tariffs” by calendar year end. Stay tuned.
 Wheat basis remains sickly as producer selling has been fairly non-existent. HRS harvest delayed again in spots by rain.
 The trade expects little change to the US wheat production number Friday morning. HRS production stands the best chance
     of seeing any change as an increase in production is likely. US export numbers could bump up also due to Black Sea issues.




The information contained in this presentation is taken from sources which we believe to
be reliable, but is not guaranteed by us as to accuracy or completeness and is sent to you
for information purposes only. There is a risk of loss when trading commodity futures and                       Follow Us On:
options. Country Hedging, Inc. bases its recommendations solely on the judgment of

© 2012 Country Hedging
                                               Afternoon Market Comments
                                                      Wednesday, August 08, 2012

U.S. equity markets were trading near unchanged as of mid-afternoon. The S&P 500 was up 1.4 points at 1402.71. A higher
close would be the fourth straight increase. The U.S. dollar was up .163 to 82.373. Crude oil retreated .32 to $93.55.

Today’s 10-year U.S. Treasury note auction was weak with a low bid to cover ratio and higher yields. The issue is a bump in
supply; with the Fed committed to low yields for as long as possible, yields are unlikely to show any sustained strength.

Dallas Fed President Richard Fisher said this morning that adequate monetary stimulus was already in place. He is known as
a “hawk”, so the remark was not overly surprising.

Non-farm productivity rose 1.6% quarter on quarter in Q2. Expectations were +1.4%. Unit labor costs rose 1.7% versus ex-
pectations of 0.5%.




                                                         Ethanol production


                                   817K barrels/day. Stocks -0.8 to 18.7 million barrels




The information contained in this presentation is taken from sources which we believe to be relia-
ble, but is not guaranteed by us as to accuracy or completeness and is sent to you for information
purposes only. There is a risk of loss when trading commodity futures and options. Country Hedging,   Follow Us On:
Inc. bases its recommendations solely on the judgment of Country Hedging, Inc. personnel.
© 2012 Country Hedging
                                                                                        Wednesday, August 08, 2012

                     Spot Basis Recap                          CIF Gulf (change)                        PNW (change)                           Domestic (change)
                   Corn                                 +45/ +49 U down 2                         +100 U unchanged             -37 Z Marshall, MN unchanged
                   Soybeans                             +100 /110X up 5 to 10                     N/B                          +60 X Mankato, MN unchanged
                   SRW                                  +20U/23U up 5                              NA                          -5 U      unchanged Chicago, IL
                   HRW                                  +90 U down 2                              +50U unchanged               +35-50U unchanged KCBT 11.0%
                   HRS                                  NA                                        +40U down 2                  +42 to 50U up15 MGEX 14.0%

                                                                                             Futures Price Summary
                                                                    Exchange        Month  High           Low       Settle    Change % Change 30-day Volatility
                              Corn                                    CBT          DEC 12 817.25          792.5     816.5     16.00    2.0%         34%
                              Soybeans                                CBT          NOV 12 1583           1555.25   1581.25    15.50    1.0%         33%
                              Soybean Meal                            CBT          DEC 12 478.5           467.3     477.7      5.90    1.3%         37%
                              Soybean Oil                             CBT          DEC 12 52.45           51.88     52.39      0.28    0.5%         23%
                              Wheat                                   CBT          DEC 12  917           883.75     913.5     10.75    1.2%         35%

                              KC Wheat                                 KCB         SEP 12  906            876.5    903.75      7.75        0.9%           37%
                              Minneapolis Wheat                        MGE         DEC 12 958.25           935      952.5      6.25        0.7%           32%
                              European Milling Wheat                   EOP         NOV 12  260           257.25    259.75      1.00        0.4%           32%

                              Chinese Corn                             DCE          JAN 13      2382      2371        2376     (2.00)      -0.1%          9%
                              Chinese Soybeans                         DCE          JAN 13      4730      4667        4699    (37.00)      -0.8%          23%

                              Malaysian Palm Oil                       MDE         OCT 12       2911      2854        2863    (44.00)      -1.5%          24%

                              Winnipeg Canola                          WCE         NOV 12  606            596.6       603.1    0.70        0.1%           25%
                              European Canola                          EOP         NOV 12 496.75          491.5        496     1.25        0.3%           19%

                              Cocoa                                     NYB         DEC 12      2481      2439        2469    19.00        0.8%           27%
                              Coffee                                    NYB         SEP 12      173.1     169.9       170.5   (2.15)       -1.2%          35%
                                                                                             Calendar Spread Recap
                                                    Spreads                          Exchange     Month       High         Low          Last     Change
                                                    Corn                             CBT         Z12-H13      3.75         -3.75        3.25      7.00
                                                    Soybeans                         CBT         X12-F13      9.75         4.25         7.75      3.25
                                                    Wheat                            CBT         Z12-H13        -1         -6.75         -5       0.00
                                                    KC Wheat                         KCB         Z12-H13      -8.25       -10.75        -10      (1.25)
                                                    Mpls. Wheat                      MGE         Z12-H13       -7.5          -9          -9      (1.00)




Brian Rydlund
Chris Steinhoff
The information contained in this presentation is taken from sources which we believe to
be reliable, but is not guaranteed by us as to accuracy or completeness and is sent to you
for information purposes only. There is a risk of loss when trading commodity futures and
options. Country Hedging, Inc. bases its recommendations solely on the judgment of
Country Hedging, Inc. personnel.                                                                                                               Follow Us On:
© 2012 Country Hedging

								
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