January 22, 2017

In Comes Trump

January 20th, 2017

Good Morning! Paul Georgy with the early morning commentary for January 20, 2017.

Grain markets are lower to begin the first official day (half-day) of the new US presidential administration on US dollar strength and Argentine weather. All markets will have their eyes on the events of the inauguration.

More Market Commentary:

Morning Coffee Commentary 1-20-17

How Will the Trump Administration Impact Agriculture & the Markets? In addition to our grain and livestock outlooks, we've just added a special session for our conference attendees. We'll speak to CME Group's Erik Norland for a look at how the new Trump Administration could impact agriculture and markets in general. This special conference presentation is reserved only for conference attendees and will take place Monday January 23rd at 2:00 PM CT. A recording will also be available to view at your convenience. Click here for more details.

Weekly Export Sales will be released today, a day late due to Monday's holiday. Trade estimates are for corn sales of 900,000 to 1,200,000 tonnes, soybeans 400,00 to 600,000, and wheat 250,000 to 450,000.

Soybean margins will decrease for the March through August contracts today. They will be decreased from $2,400 per contract down to $2,100.

Soybean plantings in Argentina are estimated to total 19.2 million hectares in the current 2016-17 season according to the Buenos Aires Grains Exchange. They cite the recent extreme weather as the reason for revising their previous 19.3 million hectare estimate lower.

U.S. farmers estimated to plant more than 90.52 million acres of soybeans in the coming season according to a survey by Farm Futures. They estimate corn plantings at 90.49 million acres. This would be the first time since 1983 that US farmers planted more soybeans than corn if these figures were to be realized.

Ethanol production was reported at a new record again yesterday according to the EIA energy report. They reported 1.054 million barrels per day was produced vs the previous record of 1.049 (which came just last week). This week figure was 7.2% over last year.

The International Grains Council raised its world corn production estimate up by 3 million tonnes to now 1.045 billion. They also raised the wheat production estimate up by 3 million tonnes to 752. USDA is currently using 1.038 and 753 respectively.

Funds were estimated to have been net buyers of 7,000 corn contracts yesterday. They were estimated sellers of 3,500 soybeans, 3,000 wheat, 2,000 soymeal, and 1,500 soyoil.

Former Georgia Gov. Sonny Perdue has officially been tapped by President Trump to be the 31st Agriculture secretary. Perdue has long been rumored to be the pick, but the announcement took more than two-months to be made official.

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The economic calendar is clear today ahead of the inauguration of Donald Trump. As a reminder, we'll discuss the possible agricultural/economic ramifications of the Trump presidency on Monday with CME Group's Erik Norland.

Hog futures only have a $4 premium in this year's April versus the February. Given this year's 6.8% year over year increase in Q2 production, the lack of premium is important.

Active cash cattle trade was seen yesterday at much better than expected pricing. $122 and $123 trades were noted in the South. That is a full $3 to $4 better than last week's action.

Dressed beef values were lower with choice down 1.62 and select down .57. The CME Feeder Index is 132.25. Pork cutout value is down .06.

Markets At-A-Glance – 5:00 AM

  • Mar Corn    - 3/4
  • Mar Beans   -6 1/2
  • Mar Wheat   -1 1/4
  • Mar Soymeal -2.60
  • Mar Soy oil -.04
  • Mar Dlr     +.30
  • Mar S&P     +3.60
  • Feb Crude   +.60
  • Feb Gold    -2.20

Technical Chart of the Day

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    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.
    WUC
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