Traders Wait For USDA Supply and Demand Data
Nov 08, 2013
Good Morning! Paul Georgy with early morning comments for November 8, 2013 at 5:00 am. Grain futures were quiet overnight as traders prepare for a USDA report that will have lasting implications.
The trade average estimates are looking for an increase in yield however many are thinking the market is really pricing in a much larger increase. We will find out at 11 o’clock this morning. The market will likely be volatile at the release as the high frequency traders or headline traders will cause a sharp move. Any order within the daily trading limit could get filled. We suggest checking your open orders (GTC) so you don’t get an unwanted fill.
USDA trade average estimates as collected by Reuters News Service:
Total Average Harvested
Corn Prod Yield Acres
Average trade estimate 14.003 158.933 88.097
USDA September 13.843 155.300 89.135
Average trade estimate 3.221 42.407 75.928
USDA September 3.149 41.200 76.378
US Ending Stock Wheat Corn Soybeans
Average trade estimate 0.519 2.029 0.172
USDA September 0.561 1.855 0.150
CONAB should be releasing the Brazilian production estimates at 7:30. Their last estimate for corn production was about 5.0 mmt higher than USDA.
Corn basis is a little weaker as harvest restarts after this week’s rains. Bean basis is firm as exporters and processors need inventory to meet aggressive near term demand.
Well known funds rolling positions out of the December contracts will continue today through next Wednesday.
On the CFTC Commitment of Traders report, due out this afternoon, traders are expecting a large short position by managed funds. The report by CFTC today should have them caught up on data releases after the government shutdown.
Argentina soybean planting is 11% complete, corn 39% and wheat harvest is 4% done. Brazil is expected to plant a record amount of acres of soybeans this year. They are turning pastures into bean fields which come after record soybean production in 2013.
The USDA will give us their 4th quarter pork production estimates today. It will be interesting to see how it matches up to September Hogs and Pigs report. Pork cutout values were up .48 on Thursday.
Packers are taking contract cattle at the beginning of the month with hope of buying the rest of their needs at lower money. Packer margins have turned red as product fights for space at the retail counter. A few cattle traded in the TX panhandle at 131 which would be 1 to 2 lower than last week. Beef cutout values were lower with choice down .57 and select down .45. CME Feeder Index is 165.32.
Rich Nelson will be presenting a video around noon today recapping the USDA reports, be sure to watch.
Markets as of 5:00 AM
- Dec Corn +1
- Jan Beans -1 1/4
- Dec Wheat +1 1/4
- Dec Cattle -.12
- Dec Hogs +.20
- Dec Dlr +.09
- Dec S&P +4.50
- Dec Crude -.16
- Dec Gold +.60
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