Is Corn Export Demand Ahead of Pace?
May 06, 2014
Good Morning! Paul Georgy with early morning comments for May 6, 2014 at 4:30 am.
Grain futures are lower on profit taking after Monday’s rally.
Click here to listen to Meteorologist Ryan Martin's Midday Audio Report
Traders are drawing their proverbial lines in the sand as we approach the May USDA Supply and Demand report on Friday. The demand bulls could have it their way as current corn and soybean sales are near the USDA’s total sales for the year. Corn sales for the next 4 months would have to be about 77% below the 5 year average for the balance of the marketing year. Rich Nelson, Allendale’s Chief Strategist believes it is likely that USDA will not make adjustments to the ethanol and feed use on this report.
Trade estimates as compiled by Reuters:
U.S. 2013/14 ending stocks U.S. 2014/15 ending stocks
Wheat Corn Soybeans Wheat Corn Soybeans
Average trade estimate 0.588 1.314 0.134 0.559 1.672 0.307
Highest trade estimate 0.633 1.435 0.174 0.747 2.354 0.464
Lowest trade estimate 0.570 1.231 0.125 0.425 1.295 0.200
USDA April estimate 0.583 1.331 0.135 n/a n/a n/a
USDA put corn planting progress at 29% complete which was slightly below trade average estimates. Tractors and planters are moving across the fields and some major progress should be seen this week.
Winter wheat conditions slide 2% in the good/excellent category and the poor/very poor acres increased 4%. Planting progress for spring wheat is 26% complete compared to 41% average.
Allendale’s Meteorologist, Ryan Martin has added a new product called Midday Audio Weather Update which you can listen to it by clicking Weather Update. The update is well worth your time as weather is very important to market direction.
Ukraine says it is now at war with pro-Russian insurgents after the outbreak of violence in the western port city of Odessa.
It was good to see both cash hogs and cash pork post $1 to $2 gains. Could this be the beginning of seasonal tightening or a surge in retail demand before the Memorial Day Holiday? On a seasonal basis hog numbers are going to continue to decline as the effects of PEDv over the last year will tighten supplies. Industry analysts are still looking for a 10% reduction is hog supplies this summer. The real question is how much of the decline in numbers will be made up by increased hog weights. Pork cutout values are up 2.05.
Live cattle numbers are on the increase as summer approaches. Product could see a sharp decline after the holiday buying is complete. Beef cutout values were mixed with choice up .52 and select down 2.02. The CME Feeder Index is 180.83.
Markets as of 4:30 AM
- Jul Corn -2 3/4
- Jul Beans -13
- Jul Wheat -1
- Jun Cattle +.47
- Jun Hogs +.80
- Jun Dlr -.26
- Jun S&P +3.00
- Jun Crude +.26
- Jun Gold +.40
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