February 22, 2017

Brazil Soybean Harvest Jumps Last Week

February 21st, 2017

Good Morning! Paul Georgy with the early morning commentary for February 21, 2017.

Grain markets are mixed with crude oil and the US Dollar stronger providing some lift. Palm oil in Malaysia closed lower as supplies increase. Stock indices set new highs in early trade.

More Market Commentary:

Morning Market Commentary 2-21-2017

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US Farmer selling came to a standstill after futures fell late last week. Basis bids in the country were steady on Friday.

2017 USDA Agricultural Outlook Forum starts Thursday in Arlington, Virginia. Trade will be looking for their first look at 2017 acreage and production.

Brazil’s weather will be favorable for crop development and fieldwork during the coming week with some slowing of farming activity next week due to greater rainfall in some areas.

Argentina’s weather is not quite as favorable as some areas are too wet to begin harvest. Excessive heat in the central and northern regions will have the greatest effect on livestock and humans into early next week.

CFTC Commitments of Traders report showed managed money funds added long positions of 52,527 contracts increasing corn net long to 85,360 contracts. They were net buyers of 42,500 contracts of wheat to reduce their net short position and net buyers of 20,354 contracts of soybeans totaling a net long position of 170,668 contracts.

Brazil's soybean harvest reached 24.8% of planted area by Feb. 17, above the five-year average of 17.1%.

Brazil’s state of Mato Grosso soy harvest is projected at 52% complete which is an improvement of 16% from last week. Safrinha corn planted is 58.4% done compared to 46% last week. Harvest and planting progress is well above the average pace for this time of year.

Russia is expected to export between 2.3 million and 2.4 million tonnes of grain in February, down from 2.6 million in January, says SovEcon.

Reuters - The Brazilian government has no available money to replenish depleted public stocks of food and will not buy staples such as grains anytime soon, despite an expected record crop this year, Agriculture Minister Blairo Maggi said on Monday.

China's COFCO Corp is in talks to sell 15,000 tonnes of corn to Japanese trading house Mitsubishi Corp. This is a rare foreign sale of grain from the world's No. 2 corn producer.

Macro market attention this week will focus on any fresh details on Trump/Republican tax plans with Congress on recess this week. Wednesday the Fed will release the Jan 31/Feb 1 FOMC minutes and four appearances by Fed officials is on the agenda this week.  EU concerns as the French presidential election is now only nine weeks away and as the Greece bailout impasse continues.

You are welcome to join us “On the Road”. I will be in the following locations:

Feb. 22, 2017    Ainsworth, NE at the Elks Lodge, 6:00 pm

Feb. 23, 2017    St. Paul, NE at Legion Hall, 10:00 am

Feb. 23, 2017    Cozad, NE at Elks Lodge, 6:00 pm

Reserve seating contact Jim Walz 402-760-1444

Packers reduction of chain speed has supported cutout values and improved their profit margin.

April live cattle futures discount to the cash trade late last week is supportive. However, the chart picture suggests technical resistance overhead from downtrend line and 50 day moving average.

Cash hog market remains firm as product values are led higher by strength in pork bellies.

April lean hog futures are holding the up-trending channel with resistance at 72.27 and support at 69.00.

Dressed beef values were higher with choice up .42 and select up 1.16. The CME Feeder Index is 127.69. Pork cutout value is up .81.

Markets At-A-Glance – 5:00 AM

  • Mar Corn    + 1/2
  • Mar Beans   +3 3/4
  • Mar Wheat   -2
  • Mar Soymeal +1.40
  • Mar Soy oil -.16
  • Mar Dlr     +.55
  • Mar S&P     +5.50
  • Mar Crude   +.87
  • Apr Gold    -9.10

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.
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