Good Morning! Paul Georgy with the early morning commentary for January 29, 2015 at 5:15 am.
Today’s Traders Focus: Month end book squaring, weekly export sales, chart support in equity market and currency risk. Last session of the Allendale Ag Leaders Conference, Today!
Grain markets are lower on follow through selling. However soymeal is providing support to beans. Weekly export sales could show effects of currency exchange rates. Outside markets are relatively quiet overnight while stock index traders are concerned about chart support levels.
Trade estimates for the weekly export sales report this morning are: wheat 250,000 to 450,000 tonnes, corn 850,000 to 1,200,000 tonnes, soybeans 200,000 to 400,000 tonnes, soymeal 150,000 to 350,000 and soyoil 15,000 to 30,000 tonnes. The soybean sales number will be getting a lot of attention as cancellations by China are expected.
Ethanol Production is close to last week but the stocks continued to climb by 244,000 barrels to 20.63 million barrels.
“China's state corn stockpiles are expected to climb by a record volume this year, as Beijing's efforts to boost demand with a tax rebate for corn starch exports struggle to stimulate sales,” industry officials said.
China may have to stockpile 60 mmt of 14/15 corn taking its total reserves to 120 mmt.
PRC imports of DDGs are likely to match last year's record high of 5.4 million tons, while sorghum imports are expected to rise to a record 6 million tons, up from 4.2 million tons the previous year.
EPA confirms after a 3 year review Argentine bio-diesel import eligibility for RIN generation which may trigger 15-20,000 tonnes per month of bio-diesel imports vs. US use of nearly 400,000 tonnes per month. The EPA rebuts industry concerns by saying the new program for Argentina's biofuel makers to qualify for biodiesel credits will not prompt higher flows of fuel imports from the South American country.
The FOMC meeting resulted in a patience approach to raising interest rates. This news supports dollar buying.
Update - Morning Coffee Commentary:
The stock index futures closed Wednesday on a weak note and broke the 100 day moving average. The releases of earnings by major companies are acceptable however their outlook for 2015 is dismal because of the currency exchange rate. Be alert for more volatility.
Federal Reserve Bank of Kansas City released a survey of farm bankers that showed US grain farmers are boosting demand for loans due to lower crop values tightening operating budgets.
February Live Cattle futures discount to the cash market is providing support to nearby contracts. The deferred contracts are struggling with the outlook of increasing competition from other meats. Cash cattle trade has been very light. Feedlots are trying to stand their ground after the sharp price decline. Beef values are mixed with choice down .41 and select up .08. The CME Feeder Index is 215.25.
The blizzard on the east coast has disrupted movement of meat into that area. It is expected to get back to normal by the weekend which should help improve product values. The chart picture improved with the outside day range and strong close in the pork complex. Technical indicators are registering oversold which suggest a further rally is possible. Pork cutout value is down 1.28.
Markets as of 5:15 AM CDT
- Mar Corn -3 1/4
- Mar Beans - 3/4
- Mar Wheat -3 1/4
- Mar Soymeal 1.40
- Mar Dlr .04
- Mar S&P 7.00
- Mar Crude -.20
- Feb Gold -14.00
Technical Chart of the Day
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