December 15, 2017

Grain Traders Look For Reasons To Change Trend

Good Morning! Paul Georgy with the early morning commentary for May 3, 2017.

Grain markets are mixed as traders wait for a catalyst to justify breaking out of current trading ranges. Financial markets are lackluster with Washington’s policy changes uncertain.

Weather forecast maps for the Midwest 1 to 5-day period still suggests rain to areas south and east (where much has already been planted) while drying out north and west (where most of the planting needs to be done).

Kansas wheat tour finds wheat under several inches of snow and fields with broken stocks. After the 1st day they are projecting the northern portion of tour at 43.0 bushels per acre down from last year at 47.1 bpa.

Funds were estimated net sellers of 11,000 corn, 3,000 soybeans, 5,000 wheat and 2,500 soymeal while buyers of 3,000 soyoil.

USDA will release their first look at the 2017/18 crop balance sheets using the March 31 planted acreage numbers next Wednesday, May 10th.

FOMC meeting ends today, but trade is not expecting an interest rate hike. Chairman Yellen will not have a press conference at the close of today’s meeting.

Weekly EIA report expected to show a large decline in U.S. oil inventories.

Fed Cattle Exchange offers only 1745 head this week on the electronic auction. Trade is expecting cash prices to be no worse than steady with a week ago.

Cutout values continue to rocket higher as retailers prepare for the official start of the cookout season.

June futures is leading the complex higher at the CME. The discount of futures to cash, the loss of livestock due to late season snow storm in cattle feeding areas and current condition of market ready cattle are providing the fuel for the rally.

Nearby futures have closed higher 6 days in a row since the last correction which has added $12.00 to the price. June live cattle contract has rallied $35.75 since the October 2016 low.

Live Cattle Open Interest increases again to another record high of 423,123 contracts. The Goldman Roll is expected to start on Friday. This when they move their long positions out of the June contract to a deferred contract.

Lean hog futures have likely made a seasonal low and is getting support from the cattle complex. June contract has resistance crossing near $75.00 where the 200 and 50 day moving averages meet. Support crosses at $72.00.

Dressed beef values were higher with choice up 3.18 and select up 3.83. The CME Feeder Index is 142.76. Pork cutout value is up .48.

Markets At-A-Glance – 5:00 AM

  • Jul Corn    + 1/4
  • Jul Beans   +1
  • Jul Wheat   -5
  • Jul Soymeal +1.00
  • Jul Soy oil -.11
  • Jun Dlr     +.13
  • Jun S&P     -4.25
  • Jun Crude   +.36
  • Jun Gold    -2.50

Technical Chart of the Day

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