What Are the Key Issues On Thursday’s Report?
Sep 10, 2013
Good Morning! Paul Georgy with early morning comments for September 10, 2013 at 4:45 am. Grain futures are lower as wetter weather ahead has soybean traders taking profits. Markets are likely to remain nervous as government reports and the Syrian situation take spotlight.
USDA has to address old crop soybean stocks and new crop production. The export sales for 2012/13 soybeans have already exceeded the USDA target by about 15 million bushel with the normal annual soybean donation of 13 to 42 million bushel. Their "get out of jail free card" is some of the deficit will be made up by imports and the residual category on the balance sheet.
Soybean conditions were down 2% from last week’s 54% G/E. Producers told us what they think is an average yield for soybeans is around 39 bushel per acre. Historically, the USDA will not make that deep of a cut on the September report. Statistically it is likely they will be around 41 bushels per acre on Thursday report. However, we have been tracking 2003 which was similar. During that year, yields continued to decline into the January report. Rich Nelson presented an excellent analysis of the possibilities for the 2013 soybean crop in our Monday Afternoon broker meeting. The complete meeting is available at www.allendale-inc.com. It is an EYE OPENER!
Conditions for corn were down 2% in G/E from last week, right in line with trade expectations. Corn maturity improved 5% and many producers are starting harvest. We are getting yield report with varying results. The soil quality is having a huge impact on production this year.
Corn basis premiums are sliding quickly as central Illinois processors are 40 to 50 lower than last Friday. Blair, NE is posting a -5 to the Dec futures compared to a +1.10 last Friday.
ABARES, Australia’s government agency has reduced their wheat crop by 3% due to the dry conditions there.
The USDA report is on Thursday at 11:00 am; expect more consolidation going into the report.
Beef cutout values dip again on Monday as primal cuts lose value after Labor Day. Choice was down .90 and select was down 1.33. Fed cattle trade is expected to be steady-to-lower this week as packers seem to have a supply of contract cattle to work through.
Pork futures remain choppy as futures and index narrow the gap. Packer’s margins are slipping and packers have backed off cash bids. Pork cutout was up .45.
Markets as of 4:45 AM
- Dec Corn – 1/2
- Nov Beans -8 3/4
- Sep Wheat +2 1/2
- Oct Cattle -.15
- Oct Hogs +.02
- Dec Dlr +.12
- Dec S&P +7.25
- Oct Crude -1.07
- Oct Gold -14.90
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