December 12, 2017

The Waiting Game Ahead Of Reports

Good Morning! From Allendale, Inc. with the early morning commentary for September 27, 2017.

Grain markets remain range bound as traders wait for updated news. Weathermen add a little more rain for Brazil in the 10 to 15 day forecast with a little less rain for Argentina.

Quarterly Grain Stocks report will be released Friday at 11 am Central. This is a count of physical stocks among both producers and users of grain and holds a lot of importance. It shows ending stocks as of September 1. This represents the end of the September to August old crop marketing year for corn and soybeans and what is left after one quarter of usage for wheat. Bloomberg's trader survey has average corn stocks at 2.346 billion bushels, soybeans at 339 million bushels, and wheat 2.203 billion bushels.

Small Grains Summary is a once per year report that only reports production for four small grains...wheat, barley, oats, and rye. USDA on September 12 did not change their production numbers from August, (Total Wheat 1.739, Winter 1.287, Other Spring 402, Hard Red Spring 364, Durum 37 million bushels). Reuters' survey estimates are 1.718 for all-wheat, 1.286 for winter, 382 for other spring, and 50 for durum.

Early harvest results are sharing a common theme, "it is better than I thought." Analysts are now becoming convinced the USDA's estimate may be close to reality.

Wheat futures lead the grain complex rally on Tuesday. However, the light volume trade and overbought condition has led to profit taking.

Corn futures rallies are being met with lack of follow through as harvest begins and old crop on-farm storage comes to town.

Soybean futures are getting a bit of support from export demand and South American weather problems early in their planting season.

China has delayed enforcing sweeping new controls on food imports following complaints by the United States, Europe and other trading partners that they would disrupt billions of dollars in trade. (Associated Press)

U.S. shale producers are making more money now than at the time when oil prices were much higher as they have become more efficient, U.S. independent shale oil producer WPX Energy said.

Fed Cattle Exchange has 1342 head being offered at todays electronic auction which begins at 10:00 am this morning.

Cash cattle trade has a few cattle changing hands in IA at 105 to 105.50. Weaker futures are creating the negative bias in the cash markets this week. Packers continue with profitable margins as last week's reduced slaughter is supporting beef values.

October live cattle futures closed below the 200 day moving average on Tuesday and now is supported by the 20 day average crossing at 107.32. Spreading seems to be another factor pressuring nearby contracts.

USDA Quarterly Hogs and Pigs report will be released on Thursday at 2:00 pm. Trade averages according to Bloomberg's survey are: All hogs 102.6%, Kept for Breeding 101.2% and All Market hogs 102.7%.

October lean hog futures remain under pressure from technical and fundamental selling. This contract closed at new contract lows on Tuesday. Technical indicators are registering an oversold condition which suggest we could be in for a sharp rebound rally.

Dressed beef values were higher with choice up 2.82 and select up 2.22. The CME Feeder Index is 152.32. Pork cutout value is down 1.01.

Technical Chart of the Day

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