US beans to China from before the opening

7/20/10 GLOBAL COMMODITY ANALYTICS & CONSULTING LLC

CLOSING GRAIN COMMENTS FOR TUESDAY— The rains in the central corn belt fizzled as Tuesday’s session wore-on: between this and the reported export sales of US beans to China from before the opening, the soy complex was able to turn back higher on the day and by Tuesday’s close, August beans had pushed to new session highs. The main push in the soy seemed to stem from the bean oil finding a lot of short-covering when crude oil and equities turned and moved higher on the day. In fact, by the close, Tuesday, the lead-month crude was back up $1/bbl and had jumped back to its short-term resistance of $77.50. And although the wheat and corn stayed lower on Tuesday’s market, I suspect that the trade was ramping-up for new daily lows before they saw the beans turnaround. So, even though the Dec. Corn fell below $3.89 on Tuesday’s close, the Dec. Wheat held above its key support line of the $6 level. The feed-grains saw a mixed-bag technically as a result of this type of close in my view. I didn’t think, however, that the corn had time to trade the hit-and-miss rain pattern that we experienced on Tuesday so I’ll be looking to see if this has any impact on Tuesday night’s session—what I mean by this is that it was interesting to me to see that afternoon model maps pulled some of the precip. For areas that still need a pollination rain and at the same time the rains for areas that are already too wet were increased on the afternoon model runs. ON TUESDAY’S CLOSE BEFORE SETTLEMENTS: Wheat Down 4-5, Corn Down 6-7, and Beans up 1-3.

CLOSING LIVESTOCK COMMENTS FOR TUESDAY— Selling in the hogs right after the opening seemed to heavily influence the livestock trading pits at the Merc on Tuesday; with the Cash Index nearly $4 discount to the August Futures, and continued slow movement at the producer level, longs in the hog pit continued to push prices back down to near their lows from last week. Cattle initially sold-off in sympathy with the hogs, but as we drew closer to the final bell, shorts-covered in the feeders and this helped bring the fats back up to positive on the day. Tuesday’s trade in feeders seemed similar to the Monday session: concerns over hot weather in the southern plains seemed to keep prices underpinned. In fact, newswires reported on Tuesday before the cattle closed that the KS heat-wave from last week has reportedly killed over 2000 head. ON TUESDAY’S CLOSE: Hogs Down 160, Feeders Up 30, and Live Cattle Finished Steady to Up 10 on the Day.

This is Mike Zuzolo at Global Commodity Analytics, Have a Good Day.

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