September 1, 2015

Wake Up Call

Macros in Focus as Trading Month Ends

Good Morning! Its Monday August 31st, 2015 at 5:30 AM.

Grains markets are lower on the last trading day of the month. The current weather forecast offers little change and is allowing markets to take direction from macro economic issues. End-of-month positioning could have an impact today as well.

Update - Morning Coffee Commentary:

Rains fell this weekend among parts of the cornbelt including central and northern Iowa, northern Illinois , and southern parts of Minnesota and Wisconsin.  Totals were in the 1 to 2 inch range for much of the area, with a few spots in Iowa and Wisconsin seeing as much as 5 inches.

The eastern corn belt missed out on the rains, and do not have much forecast in the immediate future. This is causing some in the trade to be concerned with possible yield reductions in the ECB. Going forward, no major heat or early frost/freeze have been forecast.

The results of Allendale's 26th annual yield survey will be out Wednesday morning at 7:30 AM. Thank you to everyone who participated. Watch your email inbox for the results. If you're not currently signed up for the Wake-Up Call email, sign-up here, and get the results sent directly to you.

Trade estimates for this afternoons crop conditions report has good-to-excellent corn and soybean ratings dropping by 1%.

Today is First Notice Day for September contracts. 545 contracts of soybean oil were issued for delivery, and 90 contracts of corn were issued. There were no soybean or soymeal issued.

New margins requirements were announced Friday, effective with todays trade, for soybean and soyoil futures. Hedge soybean margins were raised from $2,300/contract to $2,600/contract (mini contracts $460 to $520), and soybean oil futures were raised from $800/contract to $950/contract.

Also on Friday afternoon, the Commodity Futures Trading Commission released its Commitments of Traders Report. For the week ending 08/25/2015, they reported managed money funds were net sellers of 89 corn contracts, 3,680 wheat, 4,937 live cattle, and 18,909 soybean contracts. They were net buyers of 1,728 wheat contracts.

Estimates for Thursday's Statistics Canada stocks report has all-wheat supplies falling to 6.5 million tonnes, down 37 percent from a year ago (which was a twenty year high).

The official Chinese PMI numbers are set to be released tomorrow (overnight in the U.S.) . The Chinese economy and stock market will continue to be watched closely by the entire world and any surprises could be a big influence on all markets this week.

Over the weekend, reports surfaced that China may stop large-scale share purchases of stock in an attempt to stop those it believes are "destabilizing the market", and is adding pressure to markets throughout the world.

The economic calendar this week has Chicago PMI this morning at 8:45 CDT (54.7 is the trade estimate). The health of the consumer will be in focus with auto sales out tomorrow, and several employment related reports later this week.

Feeder cattle margins were raised on Friday from $1350/contract to $1550/contract.

Last week, cash hogs fell $2.84, while cash pork was down $3.15. These declines were smaller than expected, causing a gain for hog futures. Trade this morning will continue to focus on the seasonal supply transition.

Markets as of 5:30 AM CDT

  • Dec Corn   - 3/4 
  • Nov Beans - 8 1/4
  • Sep Wheat   - 2 1/2
  • Sep Soymeal -.90
  • Oct Soyoil -.56
  • Oct Crude   -.85
  • Dec Gold   -1.80

Technical Chart of the Day

daily chart

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