All Eyes On Weekly Soybean Sales Data
May 22, 2014
Good Morning! Paul Georgy with early morning comments for May 22, 2014 at 4:30 am CDT.
Grain futures are higher led by the soybean complex. Tight supplies of old crop soybeans, positive crush margins, strong cash bids and exports are providing food for the bulls.
Weather conditions will allow for planting progress over the weekend. However the northern cornbelt is expected to see more moisture early next week. The new crop soybeans are getting support from the discount to the July contract, current tight supplies and the good planting weather will likely mean more corn acres.
Traders are chattering about farmers switching from corn to soybeans in MN and ND. Our customers are telling us they are preparing for a switch but would plant corn if the window to plant was opened.
A report from driving down I55 to southern IL last night suggests the corn and soybean crops are off to a great start. The corn looks like there was excellent germination.
Corn futures are testing support while soybeans are taking out resistance levels. The old crop corn/soybean spread tests record highs.
Ethanol margins remain positive and last week 925,000 barrel a day were produced. This was the third largest production week of the year. It looks like usage is on target to meet USDA’s 8.6% increase over last year.
Weekly Export Sales release at 7:30.
Trade estimates Trade estimates
for 2013/14 for 2014/15
Wheat 50,000-250,000 150,000-300,000
Corn 325,000-525,000 50,000-200,000
Soybeans (-150,000)-100,000 500,000-700,000
Soymeal 25,000-150,000 50,000-200,000
Soyoil 0-20,000 0-10,000
Russian grain exports in the 2014-2015 marketing year are likely to increase to 27-28 million tonnes from 25.3 million tonnes in 2013-2014.
Russia gets a new market for its gas supply as China signs a deal that could provide as much as 12% of their usage by 2018.
Ukraine corn harvest estimates are suggesting a 1 to 2 million tonne drop from last year. The Ukraine wheat could equal or exceed last year as weather conditions are beneficial for crop.
The spread between US and Brazilian soybeans continues to widen. Listen for talk of beans being sold into US.
Monthly cold storage data will be released this afternoon at 2:00 pm.
The cash cattle trade is expected to be lower this week as packers have a short work week ahead. However margins are good and retail clearance is being watched closely. Beef values were higher with choice up .93 and select up 1.08. The CME Feeder Index is 187.93.
Lean hog futures have had a strong performance this week as traders anticipate tighter cash hog supplies beginning in June. The Memorial Day holiday should provide a demand test as weather is expected to be excellent for a cookout. Pork cutout value is down 1.79. Packer margins are is the black, estimated at plus $51.79.
Markets as of 4:30 AM CDT
- Jul Corn +2 3/4
- Jul Beans +15
- Jul Wheat +3 1/2
- Jun Cattle +.12
- Jun Hogs -.20
- Jun Dlr +.10
- Jun S&P +2.00
- Jul Crude -.18
- Jun Gold +6.70
Chart of the Day
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