February 26, 2017

Wake Up Call

Money Flow Impacting Grain Markets

Good Morning! Paul Georgy with the early morning commentary for February 24, 2017.

Grain markets are mixed as technicals and fund selling add pressure as record crops are harvested in South America. Outside markets will look to see if equities can make new highs yet again.

More Market Commentary:

Morning Market Commentary 2-24-2017

What's Next for the Renewable Fuel Standard?

Listen in February 28th at 8:00 PM as we talk to Geoff Cooper of the Renewable Fuels Association about possible changes to the Renewable Fuel Standard, Biofuels policy ideas, the current Legislative Agenda, and more. Free Registration Here

Weekly export sales will be released today, one day late due to Monday's holiday. Trade estimates are for corn sales of 1,100,000 to 1,600,000 tonnes (new crop and old crop combined), soybeans 650,000 to 1,150,000, and wheat 350,000 to 600,000.

Ethanol production fell from 1.040 million barrels per day to 1.034 in the latest week. This was 4.0% over last year. The year to date numbers show 5.0% over last year. USDA’s goal is for a 2.8% increase.

USDA's AgForum acreage estimates peg soybean acreage at 88.0 million (+4.6 from 2016). They see corn acres for 2017 at 90.0 million (-4.0 from 2016), and wheat acreage at 46.0 million (-4.2 from 2016). Today we will see their full balance sheet numbers (planted acres, harvested acres, yield, production, demand, ending stocks).

Argentina's Agriculture Minister reports a record wheat harvest of 18.3 million tonnes. This is a 62% increase over last year.

FranceAgriMer rates 93% of the Fresh soft wheat crop in good to excellent condition as of February 20th. Last year at this time, 94% of the crop was rated GTE.

China's Customs Ministry reported that January corn imports were a low 160,000 metric tonnes. This was near the 142,431 from December. This is not a market moving issue.

Farm bill discussions officially kicked off yesterday with a field hearing with the Senate Agriculture Committee at Kansas State University. Discussion are expected to continue until at least the 2018 midterm elections.

Managed money funds were estimated sellers across grains yesterday. Traders estimate they sold 13,000 corn, 12,000 soybeans, 3,000 wheat, 5,500 soymeal, and 6,000 soyoil.

Economic reports out today include Michigan Sentiment and New Home Sales at 9:00 AM CT. Equities will attempt to make new highs yet again as the Dow aims for it's 11th record high in a row.

Pork stocks grew from 475.4 million lbs at the end of December up to 526.7 at the end of January as reported in yesterday's cold storage report. This was under the 538.2 trade estimate (ALDL 528.3). This represents only a 51 million lb increase from December, the smallest January increase in seven years.

Beef stocks fell from 567.9 million lbs at the end of December to 537.5 at the end of January. This was under the average trade guess of 579.8 (ALDL 573.7). This represented an unusual 30 million drop in January.

Cattle on Feed will be out today at 2:00 PM. The average estimate is for On Feed at 100.7, Placements at 111.1, and Marketings at 109.8 (all as a percentage of last year.

Dressed beef values were higher with choice up 1.66 and select up 2.02. The CME Feeder Index is 127.41. Pork cutout value is up .02.

Markets At-A-Glance – 5:25 AM

  • Mar Corn    + 3/4
  • Mar Beans   + 3 1/4
  • Mar Wheat   - 2 1/4
  • Mar Soymeal +.70
  • Mar Soy oil +.21
  • Mar Dlr     -.17
  • Mar S&P     -6.20
  • Apr Crude   -.32
  • Apr Gold    +6.00

Technical Chart of the Day

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