Good Morning! Paul Georgy with the early morning commentary for March 25, 2015 at 5:15 am.
Grain markets are quiet and steady as are the outside markets. Trade is waiting for EIA report later today.
Spreaders buying corn, selling wheat have dominated grain trade at the CME over the last few sessions. Traders are waiting for next week’s USDA data with the hope of pushing prices out of recent ranges. It appears traders are digging in their heels whether bullish or bearish. It may be time to implement some strategies that will help manage your risk as this report has historically been a price mover.
Reports out of Argentina, early harvest soybean yields are very good suggesting their crop is getting bigger.
Headlines later this week concerning the Brazil truckers and government negotiations could provide support ahead of USDA crop data.
Bloomberg’s survey of analysts is projecting corn stocks at 7.609 compared to 7.008 billion bushel last year. Soybean stocks estimate is 1.348 verses .994 billion bushel on March 1, 2013.
Reuter’s average trade estimate for U.S. plantings in million acres: corn 88.731, soybeans 85.919, all-wheat 55.796.
UkrAgroConsult expects Ukraine's wheat and maize harvests to decrease this year due to unfavorable weather during the planting season and a smaller sown area.
Wet fields in LA and TX are concerning to traders as it delays planting in that area. Early planting this year may not be as important as in the past due to large corn stocks.
China Rural Land Development Board said the country is no longer looking for maximum yield on grains, but switching to more quality in grain output. This could support larger imports as China's need for food increases.
April grain option expiration is Friday after the close.
Commodity funds bought a net 8,000 corn contracts on Tuesday, were even on soybeans and sold a net 5,000 wheat contracts.
Weekly EIA report is expected to show another new record high in U.S. crude oil inventories. The market consensus for today’s weekly EIA report is for a 4.75 million barrel rise in crude oil inventories.
Update - Morning Coffee Commentary:
Cash cattle are expected to trade steady to higher this week which is supporting futures. Beef values are firmer with choice up 1.04 and select up 1.55. The CME Feeder Index is 216.23. April futures have closed above the 100 day moving average for the second day with next resistance near 165.
Mexico, a large buyer of turkey and chicken, eased restrictions on shipments of U.S. poultry after earlier banning supplies from states that reported commercial cases of bird flu.
The country will now allow some imports of chicken and turkey from California, Missouri, Arkansas and Minnesota. All four states this year reported detections of the highly contagious variety of avian influenza in commercial flocks.
Canada’s second largest slaughterhouse has canceled its purchase of 23,000 hogs due to a workers strike. This plant produces pork for US and Japan.
Lean hog futures could have put in a reversal in the back months. Nearby contracts battle the large supplies of pork currently available. The USDA Hogs and Pigs report will be released on Friday at 2:00 pm. Trade is looking for most categories on this report to show an increase of 4.5% to 5.5% above last year. Pork cutout values are down .08.
Markets as of 5:15 AM CDT
- May Corn 1
- May Beans - 3/4
- May Wheat 0
- May Soymeal 0.00
- Jun Dlr -.26
- Jun S&P 1.75
- May Crude -.07
- Apr Gold .20
Technical Chart of the Day
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