Can Upcoming Reports Revive Volume In Grain Markets?
Jun 26, 2014
Good Morning! Paul Georgy with early morning comments for June 26, 2014 at 4:30 am CDT.
Grain futures are higher on short covering while outside markets are very quiet.
A continuation of moisture patterns across the corn and soybean growing areas have traders convinced 2014 will provide a bumper crop and record yields. Technical indicators are registering oversold and history suggests volatility after June 30 stock and acreage reports. Talk to your Allendale Representative about risk management strategies.
Weekly ethanol production is back to normal after last week’s record. The processor’s margins have slipped due to a decline in ethanol values and the sharp drop in DDGs. In Iowa DDG prices fell from $201 to $151 per ton in just three weeks. It is expected that corn for ethanol use will exceed USDA target for this marketing year.
EU wheat harvest is going well with production not seen since 2008. Russia continues to offer wheat out of the Black Sea at much lower prices than US.
The USDA will release the Weekly Export Sales Report at 7:30 this morning.
(Reuters) Trade estimates for Trade estimates for
Wheat 0 300,000-450,000
Corn 150,000-300,000 200,000-300,000
Soybeans 50,000-150,000 200,000-400,000
Soymeal 0-100,0 0-150,000
Soyoil 0-20,000 0-10,000
China said on Wednesday it would boost domestic grain reserves by 25 million tonnes this year and maintain sufficient stocks to supply no less than six months of demand. The government is also aiming to add 50 million tonnes of new storage capacity this year and the next.
The warehouse fraud at China’s third largest port is causing new rule making which could drive small firms out of the market. These new requirements could increase risk that customers without lines of credit may default on services such as hedging and imports.
The Commerce Department said gross domestic product fell at a 2.9 percent annual rate, the economy’s worst performance in five years, instead of the 1.0 percent pace it had reported last month. The difference between the second and third estimates was the largest on record going back to 1976.
Stats Canada will give us their projections on the number of acres planted to wheat and canola in 2014 on Friday morning at 7:30.
CME grains close at noon on Thursday July 3 and reopen 8:30 AM Monday morning July7.
Quarterly Hogs and Pigs report will be released on Friday at 2:00 PM. While most of the private market analysis group believes we will have 10% year over year declines in slaughter in the coming weeks, the question is whether USDA will show that on Friday’s Hogs and Pigs report. The key weight group is 120-179 lbs. Pork product demand continues to be strong as cutout values were up 2.14.
Cattle feeders hold market ready numbers back which continues the pattern from the past seven weeks. Cash cattle prices may now post their fourth week of appreciation. The question remains; is the historical downturn in demand for beef after the July 4th holiday going to weigh on fed cattle prices? Beef values are mixed with choice up .88 and select down .17. The CME Feeder Index is 207.93.
Trading maybe quite after 11:00 AM today as Team USA will be playing for the World Cup.
Markets as of 4:30 AM CDT
- Jul Corn +2 1/2
- Jul Beans +4 3/4
- Jul Wheat +1 3/4
- Aug Cattle +.40
- Jul Hogs +.00
- Sep Dlr +.00
- Sep S&P -1.00
- Aug Crude +.04
- Aug Gold -10.10
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