Markets Deal With Impact Of Weather Forecast
Jan 31, 2014
Good Morning! Paul Georgy with early morning comments for January 31, 2014 at 4:35 am.
Grain futures are mixed in very narrow trading ranges. The forecast for another winter storm followed by extreme cold temps for next week is providing support. This creates problems when moving agricultural commodities and filling end-users needs.
Corn basis jumps at some ethanol plants as they prepare for heavy snowfall across the central Midwest. Indianapolis is forecasting 10 to 22 inches early next week.
Weekly export sales data showed strong sales for corn, soybeans and wheat. No cancellation from China in soybeans. Brazil exporters are saying basis continues to weaken at their ports as harvest picks up. Economic and civil unrest in Ukraine has caused world buyers to come to US for purchases of corn. The Argentine inflation problem is causing strong producer holding there which is slowing exports out of those regions.
China is now on holiday until Feb 5 for their Lunar New Year Celebration.
The Farm Bill has passed the House and creators of the bill expect President Obama to sign bill as soon as it hits his desk.
Cargill said yesterday they were going to idle a soybean processing plant in Raleigh, NC this spring. They cite the reason for closing was the potential lack of demand for meal due to the large bean crop in South America.
The Energy Department is working on ways to deal with the propane shortage in areas that prices have exploded to record levels.
Cattle Inventory report out this afternoon should show us big pictures view of the cattle industry. Trade will be watching for indication of expansion of cow herd. There were a few more reports of cattle trading yesterday at 145 in the South and 146 in the North. Beef cutout values were lower on Thursday with choice down 1.08 and select down .84. The CME Feeder Index is 171.55. Futures traders are in a tug-o-war with price direction. They are dealing with the idea that dressed beef and fed cattle prices have topped. However the support comes from the big discount of futures to cash cattle values.
Hog producers are in line for another winter storm moving across the Midwest which is likely to disrupt movement of hogs to market and product to the retail counter. Pork cutout values are up 1.62 on Thursday.
Thanks to all who were online watching and listening to the Allendale Ag Leaders Conference for 2014. If you were not able to listen to all the presentations, the Wednesday and Thursday sessions were recorded and email was sent to you with a link so you can listen at your convenience. If you did not subscribe already to these presentations will be available for purchase starting Monday.
Markets as of 4:45 AM
- Mar Corn – 3/4
- Mar Beans +2 1/4
- Mar Wheat + 1/2
- Feb Cattle +.20
- Feb Hogs +.12
- Mar Dlr +.04
- Mar S&P -9.00
- Mar Crude -.29
- Feb Gold +3.90
Chart of the Day
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