Market Report

Dow +127.62
S&P +11.97
Nasdaq +45.02

The S&P 500 touched an intraday record this morning, topping levels last seen more than a year ago in a reflection of investors’ bets that the U.S. economy remains a pocket of solidity in a troubled world.

The S&P 500 climbed 0.5% to 2141.02 early this am, exceeding its intraday record of 2134.72 hit in May 2015. The Dow Jones Industrial Average rose 106 points, or 0.59% to 18252. The gains left the S&P 500 on pace to close at a record, with the Dow Industrials within 1 percentage point of the blue chip index’s record close of 18312.39.

A better-than-expected jobs report Friday was the latest boost to S&P 500, which has gained more than 16% since falling to a yearly low in February. Stocks have been bolstered by signs of strength in the U.S. economy, a recovery in oil prices and the Federal Reserve’s cautious stance toward raising interest rates.

Some investors and analysts said the rally highlights the appeal of U.S. equities at a time when the global economy faces an uncertain future in the wake of the U.K. vote to leave the European Union. At the same time, central banks are continuing extraordinary efforts to promote growth and inflation that have helped send government bond yields to historic lows.

http://www.wsj.com/articles/european-stocks-buoyed-by-rally-in-japan-1468223360

Grain Markets 7/11/16 @ 11:55am

Sept Corn -8’2@3.46’6
Dec Corn -8’2@3.54’2
Aug Beans+0’2@10.83’4
Nov Beans+2’0@10.59’6

With corn losing almost $1 from the highs we are now under the spring insurance level of $3.86.  Fundamentally the crop looks good and another trend line production year or above year will increase carryout.  I fear the bears and the possibility of corn dropping below $3.25, though I am not ruling out the markets ability to re-trace back to $4.00 it will surely take the help from some hot and dry weather to get us there.

Demand seems to be strong, many anticipate USDA bumping export demand.  With a good crop we would also see ending stock move higher and possibly a reduction in corn used for feed.  There is talk of wheat competing with corn for feed usage.

Opportunities –

• Reserved for clients

Beans:

With USDA predicting and average of 46.7 Bpa.  A swing in either direction can really change bean pricing.  Based on fixed demand, a yield of 48 bpa would potentially give us a 441 mln bu carry out, while 44 bpa take us down to 109 mln bu carryout.  You can see the significant difference here.

Chinas demand for beans remains strong, however if China continues to have financial issues and is forced to devalue currency, could ultimately give them less buying power.  Just keep in mind China is about 60% of the worlds export soybean demand.  Chinas financial situation is certainly worth paying attention to.

Concern of a LATE La Nina still remain for beans.  Thoughts that weather concerns surfacing in August adds to uncertainty.  The next 30 days keep a close eye on weather as it is likely to cause a roller coaster of market volatility.

Weather:

Weather has certainly been the dominating factor in market movement.  More wide spread rainfall and cooler forecasted temps have removed a lot of weather risk premium from the markets.  Though we are running out of time, there is still an opportunity for weather risk to once again become a factor.  The next 5 days offer rains throughout the Corn Belt, the eastern Corn Belt (needing rain) looks to have good rain in the forecast.

Greg Mockenhaupt

ProEdge Risk Management Consultant

P: (402) 685-5613 | Greg.Mockenhaupt@cvacoop.com

Greg Mockenhaupt

1007 County Road O

Oakland, NE 68045

www.cvacoop.com