Brazilian Soybeans Are Getting Cheaper By The Day
Jan 23, 2014
Good Morning! Paul Georgy with early morning comments for January 23, 2014 at 4:30 am.
Grain futures are higher as bargain hunters are looking at oversold technical indicators and hope for export demand improvement.
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Japan bought wheat overnight and Saudi Arabia is tendering for 600,000 wheat. The export sales report will be delayed until Friday due to Washington being closed early this week. The EIA report will be released this morning which will be important in calculating corn use for ethanol.
Weather in South America has rain in the forecast and if you believe in the Euro models, the drought is over. Brazil should be back in the fields harvesting their early bean crop by the weekend.
We have not seen any confirmation of cancellation from China however the trade has been expected the switching of purchases from US to Brazil. Nearby soybean values are 1.00 per bushel less in Brazil than at the US gulf. There also is talk that China may have been buying new crop US soybeans.
The lack of a resolution with China over the GMO issues is backing up DDGs in the US and pressuring processor margins. Soybean basis has weakened along with futures being under pressure.
Markets are in a trading range with spreaders creating the volume during most of the daily session.
Cattle trade is on fire as packers paid as high as 150 in Nebraska yesterday. Using current beef values they could pay as high as 155 and still make money. However, the real question is how much and how long will consumers pay up for beef with cheaper other meats in the retail case? No one knows as this is a supply driven market with box beef movement down about 30% from last year. Beef cutout values are higher with choice up .33 and select up .29. The CME Feeder Index is 170.41.
IA pork producers are at the Winter Pork Congress with the #1 concern being the PEDv. Hog weights are several pounds heavier than a year ago, compensating for some of the pig loss from the virus. Traders are expecting tighter hog supplies as we move into the summer months. Pork cutout values were down .29 on Wednesday.
Markets as of 4:30 AM
- Mar Corn +1 3/4
- Mar Beans +1 1/4
- Mar Wheat +4
- Feb Cattle +.47
- Feb Hogs +.02
- Mar Dlr -.34
- Mar S&P -4.75
- Mar Crude +.08
- Feb Gold +6.50
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