Good Morning! Paul Georgy with the early morning commentary for October 25, 2016
Grain markets are mixed as traders weigh an advancing US harvest vs strong demand hopes. Outside markets have crude, equities and gold all higher.
Allendale Ag Leaders October Webinar is TONIGHT at 8:00 pm CT. South American production potential is still in question. Find out what to expect from South America this year and beyond as we welcome Dr. Michael Cordonnier to the Allendale Ag Leaders Webinar Series. Get Dr. Cordonnier's thoughts on how South American corn and soybean production will impact US markets. Register Here
Crop Progress out yesterday afternoon had corn reported 61% harvested (compared to the 60% trade estimate and 62% five-year average). Soybeans were 76% harvested (77% estimate, 76% five-year average), and winter wheat was reported 79% planted (82% estimate and five-year average).
Weekly export inspections were very strong for soybeans at 2,739,744 tonnes. Corn inspections were reported at 541,527, and wheat inspections were 244,331.
Soybeans rallied yesterday on a drive higher by vegetable oils when new highs for both palm and soybean oil were made. The Malaysian government released their annual economic outlook, and projected palm oil production would run at 18 million tonnes, 9.8% under last year. Traders suggest this supported the bean market enough to further spark technical buying.
South America's forecast shows ample rains across Brazil over the next two weeks while Argentina sees some drier conditions the second week of the forecast. Neither forecast looks to disrupt production at this time.
China's Customs Ministry released details on the September soybean import numbers which had already been released. They noted that of the 7.194 million tonnes of imports last month, Brazil supplied 3.756, Argentina 1.453, and the US of 1.356. Canada, Russia, and the Ukraine supplied the remainder.
MARS, The EU crop monitoring service, lowered its yield forecast for this year's corn cop from 6.84 tonnes per hectare to 6.82. This was only slightly over last year's drought damaged 6.31. The soft wheat yield was lowered from 5.63 to 5.62.
Not surprisingly, managed money funds were estimated buyers of 13,000 soybean contracts and 11,500 soyoil contracts in yesterday's trade. They were estimated sellers of 8,000 corn and 7,000 wheat contracts.
US Dollar and macro traders will watch the 8:00 AM CT Case-Shiller 20-City Index, and the 9:00 AM Consumer Confidence reports this morning.
September through mid-October's hog kill has run 4.5% over last year and pork production is up 4.1%. The September Hogs and Pigs suggested the kill during this period would run 4.1% over. So even with a hurricane related low kill week in hand, we are still over the level implied by the H&P report.
Cattle showlist numbers were unchanged from last week after three straight weeks of increases.
December cattle futures have rallied 8.65 from the October 14th lows. Traders are trying to determine if this is another false flag, or whether THE low is in for the whole downtrend.
Dressed beef values were higher with choice up 1.20 and select up .44. The CME Feeder Index is 119.48. Pork cutout value is up .89.
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