Good Morning! Paul Georgy with the early morning commentary for January 23, 2015 at 5:15 am.
Today’s Traders Focus: Export sales at 7:30 am, Cattle on Feed report at 2:00 pm and US Dollar strength.
Grain markets are quiet ahead of the export data. The Dollar surges higher as disinflation globally weigh on major economies. Crude oil stays within its consolidation range.
Weekly export sales estimates for this morning’s report are: wheat 200,000 to 400,000 tonnes, corn 800,000 1,000,000 tonnes, soybeans 400,000 to 700,000 tonnes, soymeal 50,000 to 250,000 tonnes and soyoil 5,000 to 30,000 tonnes.
Weather conditions vary across Brazil and Argentina but generally supportive to row crops. There is a trend that the trade is looking for a smaller soybean crop out of Brazil, however, we have to remember estimates are projecting 94 to 96 million tonnes. Last year’s record crop was only 88.2 million tonnes.
Agroconsult out of Brazil lowered their bean production estimate to 93.9 vs. their last estimate of 94.8 citing the dry first half of Jan as the reason for the decline.
Mato Grosso is reporting soybeans harvest 4% complete versus 4% last year and Parana harvest is ahead of last year at 4% complete verses 1%.
Argentine government lowered their planting estimate on beans from 20.2 million hectares to 20.0.
Update - Morning Coffee Commentary:
27th Annual AG Leaders Conference Series: Next week, we kick off our 27th annual outlook conference. Back this year, on day two of the conference (January 28th at 1:30 CST), is Drew Lerner of World Weather, Inc. Register here to get Drew's expectations for spring and summer planting and growing weather. In addition to the U.S., Drew will cover the major growing regions of Canada, and South America with topics such as:
- When can the US farmer expect to start Spring Planting?
- Will South American weather be conducive to record production estimates?
- What is the outlook for major wheat growing areas throughout the world?
- What can we expect during the Midwest pollination timeframe?
Ethanol production rose in the latest week from 978,000 barrels per day to now 979,000. This was 8% increase over last year and brings our year to date production to a 5.4% increase.
Key support in corn is the 100-day moving average for the March contract is $3.77 ½ with resistance at $3.91. May corn’s 100-day moving average crosses at $3.86 with resistance at $3.99.
The EU announced they will be spending 60 billion euros per month thru at least Sep of 2016. Given the magnitude of the QE out of the ECB (SocGen Bank thinks the eventual total will be needed to be closer to €3trillion to have a meaningful impact on inflation) before the program is completed.
Cattle on Feed Estimates: On-feed Jan 1 is 101.4 %, Placed in Dec is 95.7%, and Marketed in Dec is 95.8%. If COF estimates are confirmed, January would mark the 3rd consecutive month of larger on feed numbers, which along with record weights supports ideas of increasing beef supplies.
Cash cattle traded at 160 in KS compared to 164 last week. Beef values are mixed with choice down 1.54 and select up .48. The CME Feeder Index is 220.23.
Pork stocks increased moderately during the month of December to 497 million lbs. of pork. Though it was an increase we are still 10% under last year. The five year average change is a 3 million lbs. decrease during December. Futures continue to notch new lows while pork cutout values are down 2.34.
Markets as of 5:15 AM CDT
- Mar Corn -1
- Mar Beans 3/4
- Mar Wheat -3
- Mar Soymeal .40
- Mar Dlr .83
- Mar S&P 1.25
- Mar Crude .39
- Feb Gold -5.60
Technical Chart of the Day
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