January 27, 2015

Soymeal Strength Fires Up Soybeans

January 27th, 2015

Good Morning! Paul Georgy with the early morning commentary for January 27, 2015 at 5:15 am.

Today’s Traders Focus: FOMC Meeting results, Allendale’s Conference, Technical support and resistance levels and the outside market sentiment.

Grain markets are mostly unchanged in quiet overnight trade. Outside markets are also quiet ahead of Fed meeting today.

Allendale will release their 2015 Price outlooks for corn and soybeans this afternoon at the Ag Leader’s Conference. The presentation starts at 1:30 CT. Sign-up NOW and receive 2 bonus webinars. Click here for more details.

Corn continues to hold support at 3.82 with the 100 day moving average crossing at 3.77 ¾. Stay alert to this as a pivot point as we close out the week and month.

March soybeans have chart resistance at 9.92 and then at 10.00 with support at yesterday’s low of 9.67.

Intermarket spreading and talk of commercial pricing in meal before end of the month has soymeal leading the charge higher. Soybean oils posted lows on Monday not seen since early 2009.

Congressional Budget Office (CBO) is projecting plantings of 89.0 million corn acres, versus 90.6 million sown in 2014, and soybean plantings of 86.0 million acres, up from 83.7 million planted last year. The CBO is forecasting a corn crop of 13.496 billion bushels, down from 2014’s record of 14.2 billion bushel. They are projecting a soybean crop of 3.829 billion bushels, which would be less than the 3.97 billion in 2014.

Update – Morning Coffee Commentary:

Chinese meal prices are at the lowest level in three years which should trigger additional export cancellations.

Argentina raised their wheat crop estimate to 13.9mmt from 13.2mmt previously and the USDA’s 12mmt figure.

Industry groups in Canada released a report that suggest Canada’s two big railways are failing to meet demand for moving grain from farms to ports and North American buyers.

Standard and Poor’s lowers Russia’s credit to junk status and the snow storm on the US east coast will be factors affecting trade today.

Can the livestock markets put together 2 higher closes in a row? After the volatility that was seen on Monday traders may want to get back on the long side, however, it is likely rallies will be met with some resistance. Cash cattle are expected to be steady this week although asking prices are higher. Feeder cattle auctions are reporting sales of $10.00 to $25.00 a hundred weight less than last week.

February cattle futures had an outside day on Monday which many times signals a reversal. The deferred contracts of live cattle were supported by the low placement figure on Friday’s COF report. Beef values were weak as choice was down 2.33 and select down 2.44. The CME Feeder Cattle Index is 217.61.

Russian veterinary body Rosselkhoznadzor said they will allow imports of pork from 6 European Union countries that are outside of the sanction list.

Lean hog futures put in a strong performance on Monday that if Tuesday can produce another higher close many will be talking about a bottom being made. The futures discount to cash should provide some support. Pork cutout values are up .09.

Markets as of 5:15 AM CDT          

  • Mar Corn   – 1/4     
  • Mar Beans   +1        
  • Mar Wheat   – 3/4
  • Mar Soymeal +.70
  • Mar Dlr     -.04
  • Mar S&P   -10.00
  • Mar Crude   -.04
  • Feb Gold   +2.10

Technical Chart of the Day

daily chart

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    Allendale Advisory Contributor:


    Paul Georgy

    Paul is one of the founders of Allendale. He is very active in the futures industry and currently serves on the Board of Directors of the National Futures Association.