December 12, 2017

Corn Market Is Looking For A Reason To Rally

Good Morning! From Allendale, Inc. with the early morning commentary for August 28, 2017.

Looking forward to meeting many of you at the Farm Progress Show in Decatur, IL on Wednesday.

Grain markets are looking for something positive as weather conditions in Midwest are expected to be below normal but no frost in the forecast. Producers are left with marketing decisions from previous contracts coming due this week. While weekly closes at new contract lows in corn is not a friendly signal. Technical indicators are oversold which could lead to a rally at any time.

Allendale’s August Ag Leaders Webinar is set for tomorrow evening, August 29th at 8:00 pm CDT. This month we will be discussing Yield Estimates and Macroeconomics with R.J. O’Brien’s Chris Modaff. Register Here

Allendale Farmer Yield Survey results will be released on Friday at 7:30 am CDT.

CFTC Commitment of Traders report showed managed money funds now net short corn soybeans and wheat. Last week funds sold 56,875 to make them net short 17,073 corn, sold 8,995 contracts of soybeans, now short 23,394 and sold 32,515 contracts to be net short 66,751 contracts of wheat.

Farm Journal/ProFarmer Crop Tour results were released on Friday. They put the US Corn yield at 167.1 bushels per acre for a total yield of 13.953 billion bushel (USDA Aug 169.5 bpa and 14.153 billion bushel). Soybean yield was 48.5 bushel per acre for a total production of 4.331 billion bushel (USDA 49.4 bpa and 4.381 billion bushels).

First Notice Day for delivery against the September CBOT grain contracts will be Thursday, August 31st.

Crop Conditions report this afternoon has trade looking for 1-2% gain in corn rating vs. 62% last week, 75% last year and 75% for the 4-year average.  Soybean ratings are expected to be up 1-2% this week vs. 59% last week, 72% last year and 72% for the 4-year average.

Farmer basis contracts and price later contracts will force decisions to be made this week.

Please fill out Allendale's 28th Annual Yield Survey, the final day of survey is August 30, 2017 with results being released on September 1, 2017. You know your fields better than anyone. Help with another successful survey. Call 800-262-7538 or go to http://www.allendale-inc.com/2017-yield-survey/

Baker Hughes rig count 759, down 4 on the week.

Cattle on Feed report was released on Friday at 2:00 pm. Trade average estimates are: On Feed 104.7% (Actual 104.5%), Placed 106.2% (Actual 102.7%) and Marketed 104.9% (Actual 104.1%) of a year ago.

August 1 On Feed estimate was pegged at 4.1% over last year. That is the largest number for August 1 in five years. Based on the lower than expected placement the call today’s futures opening is higher.

Cash cattle traded at 106 to 107 last week which is a new seasonal low. This week could see feedlots trying to resist lower bids as basis shifts.

October futures has important support at 104.62 with resistance at Friday’s high of 108.47 and then the 20-day moving average at 109.10.

Lean Hog seasonal tendency has an important date on August 28 as suggested by Moore Research. This date typically is the seasonal point for a bounce on both the October and December lean hog contracts. For the October contract, it is usually the main low ahead of expiration.

Cash hogs remain at a 16.00 premium over the October futures leaving room for cash to work lower.

Dressed beef values were lower with choice down .43 and select down .36. The CME Feeder Index is 143.24. Pork cutout value is down .77.

Technical Chart of the Day

If you have any questions on any of our content, give us a call at 800-262-7538 or service@allendale-inc.com


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