Optimism For Soybean Exports
Oct 18, 2012
Good Morning! Paul Georgy with early morning comments for October 18, 2012 at 5.10 am. Grains are higher led by soybeans on hope of aggressive export sales this week. Lack of cash movement is providing underlying support for all grains. Last year corn supplies were tight in August and September, just like this year. In 2011 ethanol producers waited until new crop corn was available then started production aggressively. Right now we have new crop corn in the system but ethanol producers are not responding. Wednesday’s report showed production of 797,000 barrels per day for last week. That was down 12% from a year ago. USDA thinks production will fall 10% from last year. Though year to date ethanol production is 7% under last year, we are now slipping below that pace. The Renewable Fuels Association economist who was guest presenter on the Monthly Allendale Ag Leaders Webinar believes the USDA could reduce corn usage for ethanol down to 4.2 billion bushel. Reuters reported from London that Brazil is ramping up sugar ethanol production of which they look to increase exports by 30% next year. The US will be the target for most of that increase. Weekly export sales will be out at 7:30 this morning. Trade estimates are wheat 250-375 tmt, corn 100-300 tmt, soybeans 650-850 tmt, soymeal 150-250 tmt and soyoil 10-15 tmt. The spread between Brazil and US corn is about $40.00 per tonne for our Pacific Rim buyers. Brazil weather is as advertised, still on the wet side in the south with more beneficial rains in the north. Argentina is getting more rain. China economic data released overnight shows 3rd
quarter growth of 7.4%. That is the slowest growth since early 2009. The livestock traders are waiting for the Cattle-on-Feed report tomorrow afternoon. Trade average guesses are On-Feed 97.8%, Placed 85%, and Marketed 89.8%. The marketing figure for September and the lower slaughter during the first few week of October have traders concerned about a backup of cattle on the horizon. Product strength has improved packer margins but a larger slaughter could turn things sour quickly. Wednesday boxed beef was firm, with choice up .61 and select up .20. Cash cattle are at a standstill. The firm product has feedlot looking for more money this week. Pork cutout values were .92 higher. Bull spread has been the feature in a quiet market in hogs. We’re getting a great response for our Ag Leaders Webinar
this month which will feature a look at the soy complex with Rich Nelson, Frank La Placa, and our special guest, Al Ambrose. We hope you can join us. Registration
is free and open to everyone.
Markets as of 5:10 AM
Dec Corn +6
Nov Beans +19 1/2
Dec Wheat +7 3/4
Dec Cattle +.37
Dec Hogs +.15
Dec Dlr +.05
Dec S+P -.50
Nov Crude -.02
Dec Gold -4.60
Allendale Advanced Charts
Yesterday Dec Lean Hogs pushed to higher levels again reconfirming the uptrend. What makes yesterday’s trade so impressive is that we closed on the highs. Until we see a close below $76.55 this market is in a very strong uptrend and its continuation should not surprise…Frank La Placa
Get technical analysis for corn, beans, wheat, cattle, hogs, crude and dollar markets.
Nelson Notes from the desk of Rich Nelson
The director of the American Soybean Association’s office for Indonesia indicated their state buying agency, Bulog, is interested in government to government purchases of US soybeans. No specific quantities have been announced. He suggested high prices would cut 2012 US imports to 1.6 million tonnes.
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