November 16, 2018

US Stocks Soar Fueling Grain Buying Interest

Good Morning! From Allendale, Inc. with the early morning commentary for December 4, 2017.

Grain markets are firmer as investors are looking for something of value to buy. The US stock indexes push to all-time highs on the senate passing tax reform bill and foreign investor buying interest. The US Dollar and overall commodities are getting support from beginning of month buying and year-end position adjusting.

World Weather Inc. says, "The bottom line is that today's soil moisture is still nearly ideal for planting of corn, soybeans, sorghum and peanuts in the west-central and southwestern parts of the nation, but quickly trending a little dry elsewhere..." However, the moisture condition will have to be watched closely as we approach the growing and development season.

CFTC Commitment of Traders report show managed money funds reduced their net short positions in corn by 13,703 contracts and remain net short 196,763 contracts. Last week they added to net long position in soybeans and were net sellers in wheat.

USDA says 5.28 million tons of US soybeans crushed in October.

Brazil exported 2.14 million tonnes of soybeans in November vs 2.49 million tonnes in October and 0.32 million tonnes year ago.

French farmers had virtually finished sowing soft wheat for next year's harvest by Nov. 27, with 99 percent of the expected area sown, data from farm office FranceAgriMer. (Reuters)

Funds on Friday were estimated to have been net buyers of 8,000 corn contracts, 8,000 soybeans and 4,000 wheat contracts.

Baker Hughes oil rig count was up 2 last week to 749.

Cash cattle trade ended the week at 121 in the south. Feedlots are current enough to get the higher prices. The premium in the deferred futures is also encouraging the prospects of higher price down the road.

Managed money funds were net sellers of cattle and hogs, however, hold a net long position of over 120,000 contracts in cattle.

December live cattle futures enters first notice day after the close today. Due to current discount of futures to cash we may not see many deliveries. However, the funds will be watching the stock market for directions changes.

Pork demand has been the major driver of lean hog prices.

February lean hog futures tested the 20-day moving average on Friday then rallied to close in mid-range for the week. Key support now crosses at 69.32 with resistance at 72.15.

Dressed beef values were mixed with choice up 1.35 and select down .60. The CME Feeder Index is 157.20. Pork cutout value is down .05.

Technical Chart of the Day

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