Rally Opens Bin Doors
Feb 05, 2014
Good Morning! Paul Georgy with early morning comments for February 5, 2014 at 4:30 am.
Grain futures are steady to lower. We are seeing some profit-taking after yesterday’s rally.
The rally in grains started with supportive news out of the winter wheat area. The USDA dropped the good to excellent rating of winter wheat in several key producing states. Winter snow storms and extreme cold continue to hamper grain movement. The fundamental news was enough to trigger technical buying in corn, soybeans and wheat. Key moving averages, horizontal resistance and oversold conditions all played into the sharp rally yesterday. Now the question is, can the technical traders and money managers continue to support markets as farmers sell this rally? Stay in touch with your Allendale broker for advice.
The economic problems in Argentina are creating concern whether or not they will be able to deliver old crop meal to the export market. Farmers there are holding onto soybeans as a way to fight rapid inflation and devaluation of the currency.
Cash grain buyers are reporting a pickup in farmer selling. Basis levels for corn in NE fell to the lowest levels in 2 years. Decatur processor soybean bids dropped 2 cents.
The Senate passed the Farm bill yesterday and it now expected to go to the President for signature on Friday.
Cold weather in Ukraine caused maize delivery problems in January and is prompting many buyers to turn elsewhere. Total shipments were down near 40% from December to January.
Informa lowers Brazil corn production to 66.55 which is down 1 mmt from their last estimate. They also lowered Argentina corn and soybeans while raising Brazil soybeans to 89.7 mmt.
A few cash cattle traded this week at 143 in the South. There also were a few head traded between 140.50 and 143 in IA. Beef cutout values were mixed with choice up .40 and select down .21. The CME Feeder Index is 170.99.
Iowa State University’s veterinary diagnostic lab has found a new variation of the PEDv on IL and MO farms. Cash hogs are steady. Pork cutout values were up .97.
Markets as of 4:30 AM
- Mar Corn -1 1/2
- Mar Beans + 1/4
- Mar Wheat -4 1/2
- Feb Cattle -.17
- Feb Hogs +.37
- Mar Dlr +.01
- Mar S&P -.50
- Mar Crude +.89
- Feb Gold +6.20
Chart of the Day
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