Quiet Before The Next Storm
Jul 25, 2014
Good Morning! Paul Georgy with early morning comments for July 25, 2014 at 5:30 am CDT.
Grain futures are mostly lower in a quiet overnight session. The potential size of this year’s corn and soybean harvest is keeping traders bearish.
Spring wheat crop tour sees US 2014 spring wheat yield at 48.6 bushels per acre verses a year-ago of 44.9 bushels per acre, prior five-year tour average was 44.7 bushels per acre.
8:00 AM Update:
White House adviser John Podesta has indicated the administration plans to raise the amount of ethanol and other biofuels that must be blended into the nation’s fuel supply, Sen. Al Franken (D-Minn.) said Thursday.
The U.S. House Republicans are weighing changes to the federal biofuel mandate, but serious efforts to overhaul the renewable fuel program will likely wait until next year.
China now wants imports of U.S. distiller’s dried grains, a livestock feed, to carry certification they do not contain the MIR 162 GMO strain, according to letters from trade groups seen by Reuters, after it had earlier halted import permits.
Western European wheat farmers are holding back grain in an attempt to fight low prices.
Dry weather is likely to persist across eastern Australia for the next three months, the Bureau of Meteorology (BOM) said on Thursday, exacerbating stress on cattle and adding to concerns that wheat yields could suffer in the world’s third largest exporter.
China’s protein and corn demand has decreased during the last quarter due to their smaller hog herd. China’s sow herd has dropped 8.2% in the past year (4 million sows) and market inventory down 4.8% (21 million hogs). About 1.5 million sows of the 4 million sows were taken out in April through May period.
New-home sales fell in June and May’s reading was revised significantly lower, signs that the U.S. housing recovery is failing to build momentum heading into the second-half of the year.
Remember it is not too late to get this information from the Allendale Ag Leaders "Summer Update" Conference. These Presentations were recorded and are available by clicking here.
The USDA July 1 Cattle on Feed report will be released this afternoon.
Wall Street Journal survey:
of estimates of estimates
On-feed Jul 1 98.2 97.2- 99.2
Placed in Jun 95.6 91.9- 103.5
Marketed in Jun 98.1 97.0- 100.4
Placements are expected to decline again when compared to last year due to lush pastures and short supplies of feeder cattle.
The US consumer is showing they have a strong preference for beef and they are willing to pay for it. Cash cattle have put in a strong performance this week as retailers buy product and prepare for first of month demand. Beef values are up sharply with choice up 2.97 and select up 4.13. The CME Feeder index is 212.98.
The August Lean Hog contract is a tough one to figure out as it expires on the 14th and currently a 9.00 discount to the CME hog index. Yesterday’s conference Rich Nelson suggested possible price retracements for lean hogs could move to $125 for August, $104 for October, and $92 for December. Pork cutout values are down 1.29.
Markets as of 5:30 AM CDT
- Sep Corn -1 2/4
- Aug Beans +4 3/4
- Sep Wheat +2
- Aug Cattle +.47
- Aug Hogs -.30
- Sep Dlr +.06
- Sep S&P -4.00
- Sep Crude +.00
- Aug Gold +3.80
Chart of the Day
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