Good Morning! Paul Georgy with the early morning commentary for October 23, 2014 at 5:30 am.
Traders Focus: Export data, harvest progress and option expiration.
Grain markets are higher in a light volume session. Macro markets are higher in the equities and steady in the dollar.
Traders are looking for confirmation of talk yesterday that some meal demand was being switched to Argentina. This could cause the meal pipeline to fill rather quickly.
Bean harvest has kicked into full swing and producers are reporting very good yields across most of the Midwest. An example in central MO, 190 acres had average yield of 81 bushels per acre, another producer in north central NE, average 67 bushels per acre across his entire soybean acres. However, not all are getting the super yields, our customers in central MN are harvesting 45 to 50 bushel soybeans when they normally get 60 bushels per acre.
Good harvest weather should continue into next week which will boost soybean harvest on Monday’s progress report. The wet season is expected to start across all of North and Central Brazil late this week with totals of 2.00 to 5.00 inches.
Weekly export estimates for this morning’s report are: Corn 800,000 to 1,000,000 MT, soybeans 800,000 to 1,000,000 MT, soymeal 150,000 to 250,000 MT, soyoil 10,000 to 50,000 MT and wheat 350,000 to 500,000 MT.
As we transition away from supply concerns our focus now deals with what to do about this large corn crop. Allendale has addressed in recent reports the issue that neither exports or ethanol is going to help work through the supplies.
USDA’s current corn for ethanol goal is 5.125 billion bushels which is virtually unchanged from the 5.130 last year. Though we started out with good ethanol production rates in early September, that has fallen now that margins are tightening and production is now equal to a year ago pace at 896,000 barrels per day.
The Chinese government is adding another 40 million tonnes of corn to their reserve in the 2014/15 marketing year. When adding to the inventory increases over the last 2 years they will replenish the government stocks to 100 million tonnes.
The US Dollar is quiet as it holds gains from Wednesday.
Eggs set were up 3% compared to last year while chick placements were up 1%.
The weakest links in the pork market remains the loins and butts as pork cutout value was down $2.88. Lean hog futures gave us a reversal yesterday out of an oversold condition. The discount of nearby futures to cash hog index is providing some support.
Cattle on Feed Estimates for Friday’s Report: COF: 99.7%, Placed: 101.4%, Marketed: 99.2%.
Beef values were higher with choice up $1.16 and select up $.14. The CME Feeder Index is 240.80.
Markets as of 5:30 AM CDT
- Dec Corn +1 1/2
- Nov Beans +4
- Dec Wheat +2 1/4
- Dec Cattle +.20
- Dec Hogs -.30
- Dec Dlr -.02
- Dec S&P +7.25
- Dec Crude +.25
- Dec Gold -6.00
Technical Chart of the Day
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