August 3, 2015

Month-End Consolidation Could Drive Trade Today

July 31st, 2015

Good Morning! It’s Friday, July 31st at 5:30 AM.

Grain markets are higher as we head into the last trading day of the month. Weather maps and end of month positioning will be the likely drivers of trade today as traders wrap-up July and look forward to the August USDA report.

Weekly export sales offered a bit of a surprise yesterday as sales were better than expected across the board. 2014/15 corn crop sales were reported at 364,900 tonnes (200,000 to 400,000 expected), and soybeans 416,700 tonnes (100,000-200,000 expected).

2015/16 corn crop sales were reported at 443,300 tonnes (150,000-400,000 expected), soybeans 899,100 tonnes (700,00-900,000 expected), and wheat 699,400 tonnes (150,000-400,000 expected).

Update – Morning Coffee Commentary:

Export demand has prompted steady to increased cash-grain basis bids for corn at river terminals around the Midwest.

Whispers of a “flash drought” entered the trade yesterday as some were pointing to areas throughout the corn belt that are starting to dry out. Allendale’s Ryan Martin pointed out, however, that while some areas are starting to dry, there still remains no significant heat in the forecast, and in fact we look to cool down next week.

Rains this weekend and into Monday should provide about 60% coverage throughout the corn belt as well. He will be keeping a close eye on this next rain event this weekend, read more of Ryan’s comments here, and get the Wake-Up Call each weekday morning in your email inbox free. Signup here.

The Buenos Aires grains exchange increased its estimate of Argentina’s commercial use 2014/15 corn production from 25 million tonnes to 26 million tonnes on better yields than first thought.

In a conference call yesterday, Pacific Ethanol’s CEO was upbeat on their earning potential for the remainder of the year as U.S. demand for gasoline and good exports of ethanol helped to boost its bottomline.  Wednesday’s EIA ethanol production report continued to show production ahead of last years pace.

Corn chart watchers will have their eye on the 3.77 3/4 mark today for further trade direction.

The Soyfoods Association of North America stated yesterday that food manufactures may turn to soy-based products to replace eggs in response to the price increase associated with the Bird Flu outbreak earlier this year.

Today is first notice day for the August contracts. No deliveries are expected in the soybean or soymeal contracts.

The Energy Information Administration will release its Biodiesel Production Report today with data through May 2015.

The CME responded to concerns that soybean processors will have issues entering crush spreads now that the open outcry pits are closed by demonstrating the ability of its electronic matching software and explaining its possibilities to users.

Funds were estimated buyers of 8,000 corn, 1,000 soybeans, 1,000 wheat, 2,000 soymeal, and 1,000 soyoil contracts yesterday.

The economic calendar today has Employment Cost Index at 7:30 AM CST, Chicago PMI at 8:45 AM CST, and Michigan Sentiment at 9:00 AM CST. Reports that Russia’s central bank has cut its interest rate from 11.5% to 11% will also be watched today.

A 60,000 head pig farm in near Kyiv, Ukraine was found to contain a strain of the African Swine Flu which will require all pigs on the farm to be culled.

Yesterday boxed beef traded higher with Choice trading $1.07 higher and Select trading $0.23 higher.

Have a great weekend, and feel free to call us with questions at 800-262-7538 or service@allendale-inc.com.

Markets as of 5:30 AM CDT

  • Dec Corn   +3
  • Nov Beans +1/4
  • Sep Wheat   +5 1/2
  • Sep Soymeal +.90
  • Sep Crude   -.97
  • Aug Gold   -7.20

Technical Chart of the Day

daily chart

 

    Allendale Advisory Contributor:

    Pgeorgy

    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.

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