December 23, 2014

Wake Up Call

Livestock Reports Could Impact Feed Demand Outlook

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

Traders Focus: Cattle on Feed report, Quarterly Hogs and Pigs Report, holiday shortened trading week and Russian financial moves.

Grain futures are mixed with row crops lower and wheat higher. The US Dollar is weaker as energies are on bargain hunting. Traders are waiting for more news from Russia. South American weather remains good for crop growth.

U.S. Agriculture Secretary Tom Vilsack said, the removal of Cuban trade barriers will make U.S. agricultural products “far more price competitive”, as the Obama administration announced plans to restore diplomatic relations and tries to persuade Congress to lift the embargo. Sales of U.S. agricultural products to Cuba peaked at over $710 million in 2008, before the recession, but fell to $350 million by 2013, according to the U.S.-Cuba Trade and Economic Council. Frozen chicken, soybeans and soy products, and corn are the main products Cuba now buys from the United States.

CFTC Commitment of Traders showed managed money funds increase long position in corn by 5,976 contracts while reducing their long soybean positions by 7,390. They were net buyers of 10,642 contracts in wheat to post a net long position of 15,294 contracts.

Update – Morning Coffee Commentary:

China has officially approved imports of a genetically modified Bayer soybean variety after seven years of review, raising expectations that approval notices will come soon for other biotech crops.

Informa Economics cut its forecast for U.S. 2015 corn plantings to 88.01 million acres and raised its estimate for U.S. soybean plantings to 88.78 million.

Fund trading volume was light on Friday as they were estimated to be even on corn and soymeal, net sellers of 2,000 soybean contracts and 7,000 wheat contracts.

Market closes early on Wednesday with no trading on Christmas night. Markets reopen with the pit trade on Friday morning.

South Korea has suspended imports of U.S. poultry and poultry products due to an outbreak of bird flu in the United States.

Dec 1 cattle on feed: 101% (trade est. 101.1%), Nov placed: 96% (trade est. 96.2%), Nov marketed: 89% (trade est. 90.1%), cattle marketed: 1.475 million head, this was the lowest on record for the month of November since series began in 1996-usda.

The Cattle on Feed report was seen as neutral, however, the weak beef prices may weigh on opening this morning.

Nebraska fed cattle trade lightly at $160 per cwt, steady to $2 lower than last week. Beef values ended the week sharply lower with choice down 3.38 and select down .44. CME Feeder Cattle Index is 230.63.

Pork traders will be preparing for the Quarterly Hogs and Pigs report tomorrow at 2:00 pm. Pork cutout value is down .55.


Markets as of 5:30 AM CDT          

  • Mar Corn   – 3/4     
  • Jan Beans   -3 1/4    
  • Mar Wheat   +8
  • Jan Soymeal +.50
  • Mar Dlr     -.13
  • Mar S&P   +6.00
  • Feb Crude   +.21
  • Feb Gold   -.10

Technical Chart of the Day

daily chart

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