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Good Morning! Paul Georgy with the early morning commentary for May 28, 2015 at 5:15 am.
Grain markets are higher on short covering. The US Dollar is giving back some of its gains as a Greece government official talks of a deal with creditors by Sunday.
The weather forecast looks positive to the growing crops and should allow time to get the balance of corn and soybeans planted. Soybean planting for the US is 6% above the 5 year average with the states of KS and MO well behind normal due to the wetness.
Update – Morning Coffee Commentary:
Soybean and meal markets are being influenced by the labor problems in Argentina as strikes are hampering movement of grain and the availability of products to export. There continues to be talk that unions and crushers have come to an agreement but the government has rejected the contract.
Gulf wheat premiums remain firm as traders are concerned about the declining quality of the southern plains crop. US wheat is not expected to be competitive in Egypt’s GASC tender.
Wheat farmers in southern Russia are concerned about lower yields this year due to the heat and dryness in region. Rostov is the second southern region affected by a lack of moisture after Krasnodar, the main region for wheat exports via Black Sea to North Africa and the Middle East.
A key waterway in Brazil used to transport grains will reopen soon, after it was closed for over a year due to drought, the government’s water transportation agency said.
Argentina’s government has nearly tripled export taxes on biodiesel retroactively for April to 13.2 percent. It had cut the tax to 5 percent in March from 8.9 percent in February. “If things continue like this, the Argentine biodiesel industry is on track to a crisis of unheard of proportions,” said the head of the Argentine Biofuels Association.
Egg prices rose approximately 93% from the end of April compared to current prices. Liquid eggs have jumped approximately 158% during the same period. Turkey breast meat is up 21% to over $4.00 per pound in the last four week. These price increases have been mainly due to the bird flu findings in the US.
Beef imports for April by China reached a new record high at 34,775 tonnes as demand remains intact.
Futures traders are waiting for cash market activity this week. Many are expecting a steady to lower cash but the discount could still allow the futures to rally. Establishing a long-term strategy requires a risk management plan. Call your Allendale representative to discuss the opportunities.
Dressed beef values were higher with choice up .04 and select up .68 The CME Feeder Index is 222.11. Pork cutout values are up .61.
Markets as of 5:15 AM CDT
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