Will China Really Cancel Soybean Purchases?
Dec 03, 2013
Good Morning! Paul Georgy with early morning comments for December 3, 2013 at 4:30 am. Grain futures are higher on bargain hunting.
China cancelling cargoes of corn because of GMO contamination has soybean traders banking profits. Will China cancel soybean purchases as well? Last week’s export sales report had soybean commitments at 93% of USDA’s yearly sales projection. Looking back to last year, export sales dropped sharply beginning in early December. The demand side of the equation will be very important until the January Supply and Demand and Quarterly Stocks reports.
Corn futures set lows on Monday not seen since June of 2010. Bargain hunters are helping corn rally off the lows and giving technical traders a "ray of hope" as charts suggest a potential reversal pattern.
Spread traders are talking about a seasonal adjustment to the wheat-corn spread which has widened to near record price difference in recent weeks. Call your Allendale Broker to discuss the opportunities of this spread.
Corn basis has slipped as some end-users are moving bids to the March contract from December.
Weather conditions in South America are favorable now but a long growing season ahead could provide for some excitement in US futures markets, stay in close touch with the Allendale Advisory Report.
Argentina’s Planning Minister announced an increase in biodiesel blend for domestic use from 8% to 10%. He also ordered the country’s thermo-electric plants to use biodiesel.
A US Ag attaché is suggesting the Argentina soybean production could be as much as 4 mmt larger than the latest USDA estimates due to large soybean plantings and favorable weather conditions.
Cattle futures continue to consolidate ahead of first notice day which is next Monday. Cash cattle are expected to trade steady to higher this week as supplies of market ready cattle remain tight and the weather forecast is for cold temps to move into cattle feeding areas. A close above 133.50 in December futures sets the stage for a retest of recent highs of 134.50. Beef cutout values were higher with choice up .18 and select up 1.07. The CME Feeder Index is 165.88.
Reports of PEDv on hog farms continue to rise which could impact supplies on market ready hogs in the April through June 2014 period. From the time of first reported cases of this virus, it would suggest slaughter numbers should be declining in early December. Pork cutout values were up 1.72 on Monday.
Markets as of 4:30 AM
- Mar Corn + 1/2
- Jan Beans +2
- Mar Wheat +1 1/2
- Feb Cattle +.32
- Feb Hogs +.15
- Mar Dlr -.19
- Mar S&P -4.00
- Jan Crude +.21
- Feb Gold -3.60
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