Trade Expects Another Slow Week For Ethanol

Corn – Weather maps have moderate rains, some heat but not extreme, lower ethanol expectations

↓ As long as weather maps show even moderate rains we should still expect a grind lower in price as carryout still suggests a final price near $4 unless yield or acreage is lowered

↓ Last week saw a slowdown in ethanol to 1023K, trade may anticipate another slower report today

↔ December is now lead contract, that is the chart to watch and where most trades should be

↔ Support in December is the 460 area and heavy resistance has been seen multiple times around 490

Beans – Same solid weather forecast influence, November now lead contract, new NOAA maps today

↓ Weather maps are still #1 and offer a solid enough forecast for a grind lower both for corn/beans

↔ NOAA releases an updated 3 month outlook, important for bean traders to get their first impression on how the crucial month of August may go

↔ November is now lead contract having support around 1122 ¾ and resistance around 1170

↓ Funds are likely still selling beans, possibly looking to build a similar short to what they already have in corn, in corn they are 62% of record shorts and in beans they are 44%

Wheat – Forecast remains clear for an active KS harvest, harvest pressure continues

↓ A clear 5 day forecast for KS should keep harvest and harvest pressure going

↓ Next chart support for July CHI is not seen until at or just under 550

↓ Like beans, it is likely that funds are adding to shorts being short just 28% of record

Cattle – No major cash bids reported yesterday, trade still pre pricing in cash +$0.50

↔ Yesterday’s PM BB was choice +0.18 Select -0.95 packer BE at 198.11, packer cushion $9.75

↔ No cash bids seen yet, when we do see them we will compare those bids to what futures are already pre pricing in which is to see cash +$0.50 this week (188.50 for KS/TX or 197 for NE)

↔ Funds have not been a major influence in cattle for over a year but it should be mentioned they were moderate sellers of 4K last week so still something to watch

↑ BB stepped back yesterday but remains strong over all and is still the #1 factor to watch for both cash and futures trade, this will only change when packer profits rebound over $15 which is not expected anytime soon