What is Cheap to Importers of US Grains?

Good Morning! Paul Georgy with the early morning commentary for September 22, 2014 at 5:30 am.

Grain futures are mostly lower as corn and soybeans set new lows and wheat finds support on Ukraine’s quality issues.

Traders Focus: USDA Crop Progress report this afternoon, weather forecast a bit warmer, September 30th Stocks report, and waiting for new sales announcements from USDA due to low prices.

South American Weather, Grain Stocks, and Small Grains Summary are topics that will be discussed on Tuesday, September 23rd at 8:00 PM CDT at the next Allendale Ag leaders Webinar, Sign up Now!

Harvest numbers should improve on this afternoons report in corn to 15% and soybeans to 3% to 4%.

Weather forecast looks warmer and drier which could allow for dry down and further harvest progress.

China buys 200,000 tonnes of corn from Bulgaria due to price and ongoing GMO problems with US corn. They also bought corn from Ukraine last month.

Reports out of Ukraine suggests the quality of their wheat crop will produce 13% less milling-quality wheat than last year.

Managed Money Funds increased long positions in corn by 5,579 to 87,045, they increased short positions in wheat by 5,380 to a net short position of 67,266 and they were net buyers of 6,057 soybeans to be net short 33,729.

Update – Morning Coffee Commentary:

Other Analysts are adjusting their crop yield estimates: Informa puts U.S. 2014 corn production at 14.024 billion bu based on yield of 171.8 bu/acre, they put U.S. 2014 soybean crop at 3.857 billion bu based on yield of 46.5 bu/acre.

Pro Farmer confirms it has raised its estimate of the U.S. corn yield to 172 bu/acre from 169.3 on Aug. 22, after its annual crop tour. They trimmed their corn crop estimate to 14.063 billion bushels from 14.093 in August. For soybeans, they raised production estimate to 3.884 billion from 3.812 billion in August on a yield of 47.0 bu/acre compared to 45.35 in August.

Financial markets will be looking for a reaction to the outcome of the weekend G-20 meeting of finance ministers and central bankers in Australia. President Obama will be in New York City this week on Thursday for the UN Climate Summit and various other meetings. Congress has now adjourned until after the November 4 elections.

Cattle-on-Feed report was very slightly bearish for February and April. The placement number was 97.1%, while analysts were expecting August placements at 96.0% of last year. Beef value continues to be pressured by slow retail demand. Choice was down 1.17 and select was down 2.48.

Wall Street Journal retail meat survey showed the 15-cut average for beef prices last week was $5.73 a pound, up from $5.70 a pound last week and higher than the $4.45-a-pound average in the same period a year earlier. The five-cut average for pork prices was $3.37 a pound last week, up 2 cents from an average of $3.35 a pound in the previous week. A year earlier it was $2.99 a pound. The two-cut average for chicken prices declined, falling to less than $2 a pound after a one-week gain last week. The average in the latest week was $1.93 a pound, compared with last week’s average of $2.29 a pound and $2.03 a pound in the same period last year.

Lean hog futures were sparked by rumor china had made a large purchase of pork which pushed prices into technical buy points. There has been no confirmation as of yet which could cause for a lower opening. Livestock futures called lower for the opening.

Markets as of 5:30 AM CDT                                                                     

  • Dec Corn   -1 1/2     
  • Nov Beans   -14 1/2
  • Dec Wheat   +5
  • Oct Cattle  Lower
  • Oct Hogs    Lower
  • Dec Dlr     -.04
  • Dec S&P     -6.50
  • Oct Crude   -.19
  • Oct Gold   -2.80

Technical Chart of the Day

daily chart

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