How Will USDA Deal With Tight Stocks?
Apr 09, 2014
Good Morning! Paul Georgy with early morning comments for April 9, 2014 at 4:45 am.
Grain futures are higher as traders want proof that USDA can deal with declining stocks. The late start to planting season in the Midwest, money flow and the Ukraine/Russia situation is adding underlying support.
USDA reported total U.S. winter wheat conditions at 35 percent good/excellent which was down from the 62 percent in late November before winter dormancy. A year ago the wheat crop spring rating started at 36 percent good/excellent.
The USDA Monthly Supply and Demand Report will be released today at 11:00 am.
U.S. 2013/14 Ending Stocks survey from Reuters
Figures in billion bushels Wheat Corn Soybeans
Average trade estimate 0.583 1.403 0.139
Highest trade estimate 0.625 1.478 0.147
Lowest trade estimate 0.553 1.306 0.125
USDA March 0.558 1.456 0.145
Production for South America.
Figures in millions of tonnes Argentina Brazil
Corn Soybean Corn Soybean
Average trade estimate 23.95 54.15 69.66 87.43
Highest trade estimate 25.70 57.10 71.20 89.50
Lowest trade estimate 21.80 53.00 68.00 86.50
USDA March estimate 24.00 54.00 70.00 88.50
Post-report, traders will focus on weather forecast for Midwest as farmers wait for an opportunity to plant corn. Stay in touch with the weather forecast by reading Allendale’s in-house Meteorologist’s daily comments.
Goldman Roll continues which created a large volume for the pit after the electronic platform went down late in yesterday’s session.
Funds were estimated to have been a net buyer of 10,000 corn contracts, 2,000 wheat contracts and 7,000 soybean contracts on Tuesday.
The upper Mississippi River was closed due to a barge running into a railroad bridge.
April contract of CME Lean Hogs goes off the board on Monday. Currently, futures are $6.00 under the cash index. The weakening pork demand weighs on futures as Easter ham buying comes to an end. June futures have declined sharply in recent sessions to become oversold, technically. Pork cutout values were .01 on Tuesday.
The discount of nearby futures to cash fed cattle is providing support. The product values have declined sharply over the last 2 weeks. The onset of the cookout season could help product values and packers margins. Beef values are mixed with choice down .94 and select up .98. The CME Feeder Index is 178.68.
Allendale’s Rich Nelson will be presenting a video breaking down the data from the USDA within an hour after the report’s release.
Markets as of 4:45 AM
- May Corn +2 1/4
- May Beans +9 3/4
- May Wheat +5
- Jun Cattle +.27
- Jun Hogs -.42
- Jun Dlr +.08
- Jun S&P +2.50
- May Crude -.16
- Jun Gold +1.40
Chart of the Day
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