February 21, 2018

Can Corn Exports Accelerate the Excitement?

February 15th, 2018

Good Morning! From Allendale, Inc. with the early morning commentary for February 15, 2018.  

Grain markets will be watching for the results of a few reports today. However, weather in Argentina is front and center as some of their local analysts are predicting sizeable reduction in production. Going into the long weekend, traders will be watching forecasts to prepare for Monday evenings open. The US Dollar continues to slide which should be beneficial for US grain exports but currently is having a positive influence on livestock markets.

Weekly export sales report will be released at 7:30 am CST. Trade is expecting large sales. Average estimates are corn 1,000,000 to 1,500,000 tonnes, soybeans 450,000 to 750,000 tonnes, soymeal 150,000 to 450,000 tonnes, soyoil 10,000 to 30,000 tonnes and wheat 200,000 to 400,000 tonnes.

USDA’s 94th Annual Agricultural Outlook Form will be held on February 22 and 23, 2018. This when the industry will get the first peak of what USDA is expecting for the 2018 crop.

NOPA will release the monthly crush at 11:00 am CST today. Trade is looking for 165.511 million bushels. This would be a record for any previous January production. It would also be the second largest monthly crush of all time. Sounds friendly but we are dealing with record supplies.

Weekly ethanol production, from February 3 – 9, totaled 1.016 million barrels per day which was lower than the previous week of 1.057. This marks the seventh week in a row of weak production. During these weeks production was seen from -5.1% to +1.0% year over year. However, production is running year to date 2.5% over last year and above USDA’s +1.6% estimate for the entire year.

World Weather Inc. forecast says “There will not be much rain in Argentina through at least Saturday other than a few isolated showers and thunderstorms, especially in the north. A weak frontal boundary will then likely advance from south to north Sunday through Wednesday with a band of some showers and thunderstorms. Any associated meaningful rainfall will be localized; though, this will be beneficial due to the moisture that will be added to the ground in some areas.”

Funds were estimated to have been net buyers of 5,000 corn contracts, 8,500 soybeans, 6,000 soymeal and 3,000 soyoil on Wednesday. They were net sellers of 4,500 wheat.

Bull Spreading was a feature in live cattle futures Wednesday as trade expects a steady to higher cash market this week. Fed Cattle Exchange offered 255 head with no cattle selling. Firmer product and a strong stock market is also providing support to futures.

April live cattle has initial resistance at 126.00 with key resistance at 127.20. Support comes in at 122.80.

Cash hog markets are mostly steady with product consolidating. Futures markets were sharply higher on technical buying. Discount of April contract to the cash index is supportive with Feb contract expiring.

April lean hogs may be showing a bottoming action with the impressive performance on Wednesday. Technical resistance crosses at 72.00 and support remains at 68.55.

Dressed beef values were lower with choice up .45 and select up .38. The CME Feeder Index is 147.62. Pork cutout value is up .02.

Technical Chart of the Day

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