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Strategies & Market Trends : John Pitera's Market Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: Chip McVickar who wrote (2504)	6/30/2000 11:51:24 AM
From: Chip McVickar	Respond to of 33421

Friday June 30th 2000, 9:36 AM US Cash Grain AM: Bearish Reports Bite Market, Spark Protection Bearish grain stocks report sparks cash price protection. ---------------------------------------------------------- By Gary Wulf, BridgeNews Kansas City--June 30--U.S. grain merchandisers imposed weighty levels of cash price protection on flat bids Friday morning, spooked by bearish news concerning grain stocks, deliveries and spring planting. Protection of up to 3 cents per bushel was reported on wheat, plus as much as 7c for corn and 12c on soybeans. Merchants said farmer inquiries were active, but added actual sales of cash grain remain slow. Grain buyers typically apply cash market protection--which reduces their flat price bids for unhedged grain purchases-- when they believe U.S. grain futures will fall by a similar amount once day-trading resumes at 0930 CT. "Overall, the (USDA quarterly grain stocks and acreage) report was bearish as hell," said a Kansas City grain buyer. That report indicates that U.S. producers planted nearly 80 million acres of land to corn, plus 74.5 million to soybeans, this spring. Although soybean seedings were almost a half-million acres less than anticipated, corn plantings were more than 1.6 million above trade expectations. Spring wheat seedings--at 15.55 million acres--were 800,000 above early private estimates. Some merchandisers immediately cast aspersions on the data, though, pointing out discrepancies within their local area. "They INCREASED the corn acreage figure for Ohio," interjected a Toledo merchant. "I struggle with that because it rained every other day all spring and I still know farmers that are trying to get their corn planted." Grain stocks figures were negative as well, placing current inventories at 3.587 billion bushels of corn, 775 million of soybeans and 950 million of wheat. The wheat and corn stocks were, respectively, 20 million bushels, and 100 million larger than earlier forecast. "But the biggest negative in soybeans is actually the deliveries, not the USDA report," said an Illinois merchandiser. "There were 2,000 contracts posted for delivery with no real stoppers to speak of." The trader attributed the bearish surprise to a new CBT grain delivery system, "which is basically designed to give the big boys (grain companies) a place to go with their leftover grain." Grain dealers reported "busy" phone traffic following the release of the startling reports, but added that country movement was slow. "Nobody is going to do anything before the open, especially with all the protection in place," said an Illinois merchant. BASIS: Aside from temporary adjustments attributed to protection, underlying truck basis remained relatively unchanged for spot corn, wheat and grain sorghum Friday morning. Quick-ship soybean values wavered from 1c higher to 3c lower. WEATHER: Showers and thunderstorms dotted Texas, the Gulf Coast and central Plains early Friday. BridgeNews Global Weather Services said limited rainfall and warm temperatures will affect a broad part of the central United States this week end and into early next week. However, new computer forecast models have reduced some of the intensity of the coming heat. Storms produced more than 1.00 inch of rain from northern Nebraska into southern Kansas overnight, which may slow winter wheat harvest, but also provided much-needed moisture for row crop development. More than 1.00 inch of rain also was reported during the past 24 hours in portions of the drought-stricken Southeast. Central portions of the nation will see the lowest probability for significant rainfall during the next several days. However, GWS said totally dry weather is not expected for all areas. Rain is expected to continue in Florida, southern Georgia, southern Alabama, Louisiana and parts of Texas over the next couple of days. Showers also will occur into Saturday morning from Missouri and southern Illinois to the Carolinas, but resulting amounts in this region will rarely total more than 0.25 inch. All other areas in the nation will see more sunshine than clouds and experience either warm temperatures or a warming trend. Highs this weekend will be in the 80s and lower 90s in much of the Midwest, Delta and Southeast. Temperatures in the Plains will be in the 80s and 90s, with a couple of locations in Nebraska pushing 100 by early next week. extremeag.com./