USDA Gives First Look At 2014 Production
May 09, 2014
Good Morning! Paul Georgy with early morning comments for May 9, 2014 at 4:30 am.
Grain futures are mostly lower as trade waits for the USDA Report at 11AM.
Soybean futures remain strong on firm processor basis, no new cancellation news and CONAB’s smaller than expected soybean production estimates. Soybeans are supported by trader’s anticipation of USDA lowering the 2013/14 ending stocks.
The corn market has stayed strong going into the report on spread unwinding and trade estimates of increased exports.
Wheat is watching the geo-political tension in Ukraine, the forecast for rain in the southern plains, or lack of, and thoughts that hard red winter wheat production could be down sharply on today’s report.
A few keys to today’s report:
How will USDA handle the old crop balance sheet ending stocks for soybeans?
Will the reduction in HRW wheat production be offset by increases in SRW and White wheat production?
Will USDA stick with their February Forum trend yield of 163.5 for corn and 45.2 for soybeans when we get the first look at the 2014/15 balance sheet?
How will they adjust 2014/15 corn and soybean imports by China?
Markets will likely react very quickly to today’s report and the adjustments made by USDA. Then the trade will be looking ahead to Monday’s planting progress data. Our customers are making huge strides to get corn and soybeans planted this week.
Rich Nelson, Allendale’s chief Strategist has looked at years with delayed planting and seasonal rallies in corn and found that most years the rally is complete by early June.
Go here for estimates ahead of today’s report
Cash cattle trade has been quiet this week with only a few trading at steady money early. Futures traders are wrestling with the discount of futures to cash and the potential for an increase in fed cattle supplies over the next month. Some of the potential increase in supply may already be moving to market as select beef is near April lows. Retailers seem to have their needs booked for Memorial Day. Beef values were lower with choice down 1.50 and select down .75. The CME feeder Index is 181.82.
Hog traders are waiting for proof that hog supplies are really not there. This week cash hogs found support as producers have focused on fieldwork. Widespread rain could bring hogs to market. Pork cutout values are .11 higher on Thursday.
Markets as of 4:30 AM
- Jul Corn -1 1/2
- Jul Beans + 1/4
- Jul Wheat -4 3/4
- Jun Cattle -.17
- Jun Hogs +.50
- Jun Dlr +.18
- Jun S&P -3.00
- Jun Crude +.81
- Jun Gold +1.90
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