Crop Conditions Down Slightly
Jul 29, 2014
Good Morning! Paul Georgy with early morning comments for July 29, 2014 at 4:30 am CDT.
Grain futures are mostly lower for a typical turnaround Tuesday.
Update - Morning Coffee Commentary:
Weather forecasters have pushed the rain for the western cornbelt back a few days however the second week of forecast is suggesting good rains for the cornbelt.
Crop conditions released by USDA late yesterday showed the corn crop dropping from 76% to 75% G/E. Last year we had 63% G/E and 60% in the 10 year average. The poor to very poor category was raise by 1% to 6%.
Soybean conditions fell by 2% to 71% G/E compared to 63% last year and 58% is the 10 year average. Poor to very poor was raised by 1% to 6%.
Spring wheat conditions stayed the same as last week at 70% G/E.
Export sales of soybeans to China have been very active in recent weeks. When calculating the current crush margin in China, yesterdays rally has turned it to the negative side. It is believed the improvement in China’s economy and the uncertainties of Argentina’s economic stability have sent the Chinese buyers to the US to book 2014/15 needs.
Chart analysts are suggesting the November soybeans may be headed to the gap starting at 11.29 ½.
Research suggests that USDA has a higher than normal probability of raising yield on the August report (due to be released August 12). The Reuters survey has traders estimating an average yield improvement of 5.2 bushel per acre.
Low interest rates did not help the number of existing homes under contract as it fell by 1% when Wall Street economists were predicting a .5% increase.
Mitsui’s United Grain Corp has shut its export terminal at the Port of Vancouver which is among the largest on the U.S. West Coast because of labor disputes and their inability to get ships loaded.
McDonalds in Japan is considering buying meat from Brazil since their Chinese supplier has been shut down.
Cattle markets react to USDA reports, tight supply of market ready cattle and strong retail demand. Beef values are higher again with choice up 1.92 and select up 1.84. The CME Feeder Index is 221.95. The asking prices by feedlots are expected to be higher again this week.
Cattle traders should be on the lookout for a correction especially if packers don’t pay up for cattle this week. Manage risk, call your Allendale Strategist.
The pork complex is being pulled lower by larger than expect production mostly due to heavier weights. Technical selling has weighed in on the pressure as key chart support levels are taken out. Pork cutout values are down .85.
Markets as of 4:30 AM CDT
- Sep Corn -1 3/4
- Aug Beans -2
- Sep Wheat -2
- Aug Cattle +.17
- Aug Hogs -.85
- Sep Dlr +.01
- Sep S&P -1.75
- Sep Crude -.08
- Aug Gold +4.70
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