Good Morning! Paul Georgy with early morning comments for January 16, 2013 at 5:10 am.
Grain futures in Chicago are higher led by strength in China and Europe. Money flow into agricultural commodities seems to be one reason for this positive move in prices. Traders have been looking ahead to what the March 1st stocks might look like in corn and soybeans.
We talked about corn briefly yesterday morning however the focus is what we should be watching over the next few months. Ethanol production will be very important. Can we get to within 10% of last year’s production? The weekly EIA data will be released later this morning. Export inspections will become more important as we move sold grain out of the country. Livestock production will likely have the largest impact as the feed and residual category on the USDA balance sheet for corn has a great deal of variance.
SA soybean production continues to grow. Several crop watchers are moving Brazil production up to 81 mmt. The weather forecast for Argentina is dry for the next 10 days which is drawing attention and support for both grain and soybean prices. The lack of moisture in the forecast for the southern plains and the anticipation of wheat filling the short falls in corn supply are supportive to wheat.
Technical buying and money flowing into the grain and soybean complex relieved the oversold condition going into last week’s report. We remind you that the trend in still down with critical resistance and moving averages just above recent highs. We also recommend getting some protection on new crop corn.
Call your Allendale Rep to design an option strategy for your needs. Cash cattle bids are developing at 123 in the south which compares to the 125 trade last week. Choice beef was down .63 and select was up .16. Cash hogs are expected to be firmer which is providing support to futures. Pork cutout values up .34 on Tuesday. Allendale’s Ag Leaders Conference is on January 25 and 26, 2013. Hope to see you there!
Markets as of 5:10 AM
- Mar Corn +3 3/4
- Mar Beans +10 1/4
- Mar Wheat +4 3/4
- Feb Cattle -.32
- Feb Hogs -.15
- Mar Dlr -.16
- Mar S&P -1.00
- Jan Crude +.31
- Feb Gold -4.80