May 25, 2017

Wake Up Call

Soybeans Test Technical Support

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

Grain markets are quiet as established trading ranges establish support and resistance. Weather delays for corn planting has markets seeing more soybeans. Equity markets wait for the next round of drama out of Washington.

Allendale’s Ag Leaders Monthly Webinar was held last evening, it was recorded and available by clicking on Registration.

The topic this month was South America's Impact on U.S. Prices.  Pedro Dejneka, share his insight on how South American agriculture, exports, currencies, and more could impact grain prices here in the U.S.

CME grain markets remain range bound with the upper end of range bringing on some farmer selling and the low side of range finding end user buying. July corn contract has established resistance at 3.79 and support at 3.62. July soybeans resistance at 9.80 and support at 9.42. July wheat is range bound between 4.60 and 4.20.

Rains wrap up across the Eastern cornbelt over the next 12 hours with another system pulling across the central section of the belt as we end the week and move into the holiday weekend.  Eastern cornbelt sees 1-2 inch totals with some 3 inch totals noted in eastern IN and southern OH. Western cornbelt sees .25-1.0 totals.

China's major grain producing regions, received some needed rain this week, breaking a month long dry spell that had slowed corn planting and hit winter wheat crops.

Illinois increased its corn good to excellent rating from 42% last week to now 51%. Iowa pegged their first number for the year at a strong 75% good to excellent.

China has moved to a net exporter of ethanol. April imports of ethanol ran only 23 tonnes, 99.96% lower than same period last year. Exports of ethanol during same period was 13,540 tonnes, a large 1,183% increase over last year.

Brazilian police arrest a presidential aide and two ex-governors as part of an investigation into the 2014 World Cup's most expensive stadium, another black eye for the country's political establishment that adds pressure on beleaguered President Michel Temer. (Reuters)

CME’s profits and share value have been supported by the record high volume in interest-rate futures. Euro-dollar futures has had a significant impact on CME volume as this contract has traded an average of 3 million contracts per day since the beginning of the year.

Economic markets are waiting to see if today's minutes from the May 2-3 FOMC meeting provide any information about the Fed's balance sheet discussions.

Listen to Allendale’s Rich Nelson on RFDTV at 8:15 and 8:20 today.

Fed Cattle Exchange has 2684 cattle in the auction today. Traders and feedlots are waiting for the results of this auction before becoming aggressive marketers. Country auctions of market ready cattle are lower to start the week.

Packer margins calculate to be very profitable. Daily production at 117,000 head was above trade estimates of 114,000 on Tuesday. Next week will be a short production week due to Memorial Day next Monday.

Feeder cattle auction remains at a premium to August futures as it makes sense to replace market ready fed cattle with lighter, faster gaining animals.

Cattle on Feed report is due to be released on Friday at 2:00 pm. Allendale estimate for On Feed is 99.8%, Placed 104.6% and Marketed 101.3% of a year ago. The Reuter survey of analyst’s average guess is: On Feed 100.8%, Placed 106.8% and Marketed 101.8%.

Lean hog futures continue its move higher on tighter hog supplies, retail featuring as pork is cheaper than beef and traders moving out of the long cattle short hog positions.

June lean hogs closed at the highest levels since early February. Contract high is 80.35 and lean hog futures are showing an overbought condition on the charts.

Dressed beef values were lower with choice down 2.14 and select down 1.66. The CME Feeder Index is 143.27. Pork cutout value is up .26.

Markets At-A-Glance – 5:00 AM

  • Jul Corn    + 3/4
  • Jul Beans   + 1/2
  • Jul Wheat   - 1/2
  • Jul Soymeal +.40
  • Jul Soy oil +.01
  • Jun Dlr     +.11
  • Jun S&P     +.50
  • Jul Crude   +.14
  • Jun Gold    -3.90

Technical Chart of the Day

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