Is Money Flow Affecting Prices?
May 07, 2014
Good Morning! Paul Georgy with early morning comments for May 7, 2014 at 4:30 am.
Grain futures are mixed in a very quiet overnight session.
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Corn and wheat values remain strong going into the USDA report on Friday. The key driver is money flow moving into commodities as a hedge against the effects of a full blow conflict in the Black Sea Region. Corn and wheat are getting the benefit as Ukraine and Russia are major exporters of these products.
Wheat is also finding support due to southern plains weather and a technical breakout to the upside in the July contract.
Corn traders are looking for a decrease in ending stocks on Friday’s report and planting delays especially in the northern cornbelt. These factors are adding value to the direction of corn futures.
Soybeans are fighting the selling pressure due to bull spread liquidation. More talk of cancellations has some of the longs coming out of the market. There were 176 contracts delivered against the May futures this morning with no strong stoppers.
A U.S. appeals court on Tuesday threw out an oil industry challenge to the Obama administration’s 2013 biofuel mandate, ruling that the government has "wide latitude" to decide whether to modify renewable fuel use targets, and by how much.
Trade estimates for US Wheat Production as surveyed by Reuters:
All Hard Soft White All
Winter Winter Winter Winter Wheat
Average trade estimate 1.468 0.782 0.467 0.219 2.046
Highest trade estimate 1.591 0.870 0.569 0.268 2.182
Lowest trade estimate 1.312 0.610 0.409 0.188 1.891
USDA June estimate 1.509 0.781 0.509 0.219 2.080
U.S. 2013 winter wheat 1.534 0.744 0.565 0.225 2.130
China’s government will hold a second round of pork buying in order to stabilize hog prices.
We had a second day of higher cash hog trade on Tuesday. Pork demand has been a concern with high prices and starting to see a push back. Pork cutout values were down 3.73.
Cattle futures are consolidating as traders worry about dressed beef prices working lower for a few weeks. Supplies of market ready cattle should be increasing as suggested by recent Cattle on Feed reports. Beef cutout values are lower with choice down 1.02 and select down 1.89. The CME feeder index is 181.10.
Markets as of 4:30 AM
- Jul Corn + 1/4
- Jul Beans -3 3/4
- Jul Wheat -4
- Jun Cattle -.30
- Jun Hogs -.52
- Jun Dlr +.07
- Jun S&P +.00
- Jun Crude +.84
- Jun Gold +2.70
Chart of the Day
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