How Can We Continue to Sell Beans and Not Run Out?
Jun 05, 2014
Good Morning! Paul Georgy with early morning comments for June 5, 2014 at 4:30 am CDT.
Grain futures are mostly lower in a quiet session. The July/November soybean spread is being watched closely.
Old crop soybeans are looking for possible net cancellations on the Weekly Export Sales report this morning. Traders are still struggling with how the USDA will handle the tight soybean stocks on the June 11 Supply and Demand report.
The current weather forecast is ideal for most of the Midwest row crops.
Wheat harvest is moving north in Oklahoma where yields are starting to improve. The southern portion of the state had yields in the 12 to 15 bushel per acre range.
Ethanol hit its third highest weekly production since the marketing year started on September 1. On a percent basis vs. last year, the gain was only up 6%. We are on the path of balancing out the very strong early year production rates. USDA’s goal of 8.6% more production appears reasonable. Production margins remain very strong. However a negative is ethanol stocks are now 11% more than last year at this time.
(Reuters) – The following are trade estimates for net weekly export sales of U.S. grains and soy for the week ended May 29. The USDA will release report at 7:30 am.
Trade estimates for Trade estimates for
Wheat (-50,000)-150,000 325,000-475,000
Corn 400,000-550,000 150,000-250,000
Soybeans (-100,000)-100,000 500,000-750,000
Soymeal 50,000-150,000 175,000-225,000
Soyoil 0-25,000 0-10,000
Russia’s wheat crop is forecast to be 5% larger this year than last. While Ukraine is expected to see a record wheat crop for the second year in a row. This is pressuring Black Sea export prices.
Russia’s agriculture ministry says high debt burden, lack of machinery and fertilizers remain key problems for Russian farmers.
Argentina soybean farmers are expected to move some grain in late June as they need to make credit payments. They will likely go back to hoarding as inflation rate justifies that strategy.
The World Pork Expo started yesterday in Des Moines, IA where the number one topic on pork producer’s minds was PEDv. Fund and technical selling combined with the premium of futures to cash are causing pressure on most lean hog futures contracts. Pork cutout value is down .27.
Spreading is a major feature in live cattle futures as feeder cattle contracts head for the $200 level. Cheaper feed costs, tight supply of feeders and money flow are the drivers. Following the feeder market for years, it would suggest that traders need to be using risk management tools to protect the downside because when feeder cattle futures decide to top they can fall very quickly. Beef values are weaker with choice down .55 and select up .01. The CME Feeder Index is 194.68.
Markets as of 4:30 AM CDT
- Jul Corn -0
- Jul Beans -5
- Jul Wheat – 3/4
- Jun Cattle +.20
- Jun Hogs -.40
- Jun Dlr -.09
- Jun S&P -1.00
- Jul Crude -.40
- Jun Gold -.80
Chart of the Day
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