Traders Looking for New News
Nov 19, 2014
Good Morning! Paul Georgy with the early morning commentary for November 19, 2014 at 5:30 am.
Traders Focus: December option expiration on Friday, crush spreads in soybean complex, cash markets as farmers look for storage and holiday week ahead of us.
Grain futures are lower on technical and fund selling as cash markets deal with final stages of an abundant harvest.
The meal spreads are spotlighted as Eastern cornbelt crush margins are starting to buckle. Reports of Argentine meal trading at a $75 discount to US soymeal and Brazil trading as much as $90 per tonne discount are being heard.
The CIF soybean market from now through January has put in a carry which is suggesting pipeline has adequate inventory.
Due to the considerable premium of December and January meal contracts compared to the deferred contracts, trade is watching for adjustments. The transportation problems are subsiding and with high profit margins processors are running full speed. Crushers are now reporting 6 to 8 weeks of supply on hand which should get them through the end of the year when soybean movement is expected to pick up.
The grain crushing industry association Abiove says Brazil's soybean harvest is expected to occur later than usual this year due to a drought that has delayed planting and could tighten the local fuel market's supply of biodiesel in early 2015.
More reports out of Brazil concerning poor wheat harvest yields and quality.
A ship is expected to be loaded with 45,000 tonnes of feed wheat in France heading for the United States, which would be first large French shipment to U.S. in 12 years.
Ethanol prices have recently climbed to a premium to gasoline, threatening to curb demand from wholesale fuel refiners. The main driver has been robust ethanol demand.
Ethanol processor have boosted bids for corn in the western cornbelt as farmer selling came to a halt due to cold weather and lower futures prices.
The Dairy Farmers of America and a Chinese company say they are planning a $100 million plant in Kansas to produce milk powder. (AP)
Trade estimates for Friday’s Cattle on Feed report are: On-Feed 99.8%, Placed 96% and Marketed 93%. USDA will also release cold storage data on Friday.
Update - Morning Coffee Commentary:
Temps in the plains should be warming up and could relieve some of the excitement futures traders have concerning cattle. Beef values rise as retailers prepare for post-holiday featuring. Choice is up .02 and select is up 1.23. The CME Feeder Index is 240.09.
Hog futures rallied in recent days on the idea that cash hogs posted an earlier than expected seasonal bottom and were ready to start their increase into December. However cash hogs are just a $1.09 over last week’s low when using the IA/MN data series and wholesale pork is up only 37 cents over last week’s low. Pork cutout value is down 1.43 on Tuesday.
Markets as of 5:30 AM CDT
- Dec Corn -3 1/2
- Jan Beans -9 1/2
- Dec Wheat -6
- Dec Soymeal -2.10
- Dec Dlr .05
- Dec S&P -1.00
- Dec Crude -.08
- Dec Gold 3.10
Technical Chart of the Day
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