December 13, 2017

USDA Report or Bitcoin?

December 8th, 2017

Good Morning! From Allendale, Inc. with the early morning commentary for December 8, 2017.

Grain markets are quiet as the USDA report approaches next week. The US stock indices are set for an all-time high weekly close. However, traders are anxiously waiting the beginning of trading of the Bitcoin contract Sunday night at the CBOE. The CME will start trading a Bitcoin futures contract, Sunday evening, December 17.

USDA will release US ending stocks estimate on Tuesday at 11:00 am. Trade is expecting a slight increase in wheat and soybean stocks with a slight lowering of corn stocks. Historically the USDA does not make significant changes to US data on the December report, they wait until the January report.

Trade will be watching the report closely for USDA adjustments to Argentina and Brazil's corn and soybean production estimates. Trade is looking for a large drop in Brazil's total corn crop.

Weekly export sales for corn were in line with the trade expectations. USDA's 1.925-billion-bushel goal for the year would be 10% over the five-year average and 16% under last year. Year to date sales of 902 million bushels are 7% over the five-year average and 24% under last year.

USDA's full year export goal for soybeans is 2.250 billion bushels and would be 26% over the five-year average and 4% over last year's record. Current year to date sales total 1.335 billion bushels which is 1% over the five-year average and 13% under last year currently.

Funds were thought to have been net sellers of 4,000 corn contracts, 9,000 soybeans and 3,500 wheat on Thursday.

Cash corn and soybean bids were mostly steady expect for a few locations raising bids to entice farmer selling. History suggests we are in a period where basis begins to widen as the new year approaches and more grain is moved off the farm.

China stats bureau says china's 2017 grain output is up 0.3 pct. at 617.9 million tonnes.

Russia will spend 2 billion roubles ($34 million) in grain transportation subsidies to help to speed exports in 2018, the Deputy Agriculture Minister said on Thursday. Already among the world's largest wheat exporters, Russia is trying to step up a gear after this year's record crop, which is keeping its grain storage, railway transport and export infrastructure working at maximum capacity. (Reuters)

U.S. Congress moved rapidly on Thursday to send President Donald Trump a short-term funding bill to avert a government shutdown this weekend, leaving fights over budget priorities and a range of other controversial issues for the coming weeks. (Reuters)

USDA's Thursday Actual Slaughter report, corrects the previously estimated numbers for the week of November 25. The average cattle carcass rose by 10 lbs. to 839 lbs. in one week. Cows make up about 18% of the nation's slaughter each week. A large jump was noted for cow weights as well, they went from 626 lbs. to 643 lbs. per carcass. Dressed steer weights increased 2 lbs. in the latest week to now 904 lbs. Dressed heifer weights rose 4 lbs. to 840 lbs. per head.

Beef export sales were weak and the second lowest weekly sale of the entire year. It was 40% under last year for the exact same week. However, year to date sales of beef has been 769,885 tonnes or 9% over last year.

December live cattle futures are finding support due to its discount to the cash trade. The February contract is down $3.30 this week. Pressure could be attributed to long liquidation by funds. Technical support crosses at 117.12 with resistance at 122.50.

Weekly pork sales were good at 22,629 tonnes for the 2017 marketing year, which was almost double the 11,435 tonnes posted last year in the same week. Year to date sales of 1,122,010 tonnes are 6% over last year.

February lean hogs as of yesterday's close is down $2.25. Weekly support is 67.00 and resistance crosses at 69.37.

Dressed beef values were lower with choice down 1.32 and select down .28. The CME Feeder Index is 156.11. Pork cutout value is up .43.

Technical Chart of the Day

If you have any questions on any of our content, give us a call at 800-262-7538 or service@allendale-inc.com

    Follow Us
Skip to toolbar