How Hungry Is The World For US Soybeans?
Jan 22, 2014
Good Morning! Paul Georgy with early morning comments for January 22, 2014 at 4:30 am.
Grain futures are higher led by a rebound in soybeans. There has been some interest from buyers overnight after the recent sell-off.
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There is continued talk of China beginning to shift soybean shipments from US to Brazil. Basis levels will provide an advantage to buyers going to Brazil in a few weeks.
Without heat and dryness, the forecast for South America are insignificant to CME futures traders. Crops conditions continue to be favorable, giving the Brazilian soybean crop a chance for record production.
Cash grain movement was light as producers neglect to sell after recent declines in futures prices.
The University of Illinois study of US grain and soybean forecasts suggest the USDA should develop a better survey for corn feed usage on the monthly and quarterly estimates.
Syngenta, the largest crop chemicals company, has a new product which will be available for planting in the US this year. Traders are concerned this strain of GMO corn could threaten relations with China as this product is not approved there.
Celeres, a Brazil consultant group, says farmers there have only sold 41.7% of new crop soybeans compared to 55.9% last year. Farmers are reluctant to commit to sales due to lower international prices and are still well capitalized from selling last year’s record crop at a time when low global supply boosts prices, according to the company.
Cattle futures make new highs while feedlots are setting their sites on a 150 cash price this week. The strength in product values is suggesting very profitable packer margins.
Allendale December Placements estimates are expected to be 2.1% higher than last year. Cattle feeders have been encouraged by the return to profitability in the fourth quarter driven by lower feed costs. We see extremely small cattle slaughter in February and March due to low May through September 2013 placements. Allendale anticipates Marketing’s to be 0.8% higher than December of 2012. The calendar day adjustment artificially added 4% to the actual number. Total Cattle on Feed, as of January 1, should be 5.3% smaller than last year.
Beef cutout values were higher with choice up 3.16 and select up 2.70. CME Feeder Cattle Index is 170.49.
Extreme cold weather and snow have snarled pork movement on the east coast. Pork cutout values were down .77 on Tuesday.
Markets as of 4:30 AM
- Mar Corn +2 3/4
- Mar Beans +3 3/4
- Mar Wheat +3 1/4
- Feb Cattle +.07
- Feb Hogs -.07
- Mar Dlr +.04
- Mar S&P -1.50
- Mar Crude +.57
- Feb Gold -2.50
Chart of the Day
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