Beans Lead Grains Lower Overnight
Oct 22, 2013
Good Morning! Paul Georgy with early morning comments for October 22, 2013 at 5:00 am. Grain futures are mostly lower on harvest progress and larger than expected yield reports.
USDA says corn harvest is only 39% complete compared to 53% average. Large yields and slow dry down is providing a few reasons for the slow pace. Soybean harvest is near normal with 63% complete compared to 69% average. The weather systems moving across the Midwest have kept bean harvest from reaching normal levels. Winter wheat planting progress was 79%, in line with the five year average.
A Reuter’s poll of analysts placed corn production in 2013 less than USDA’s September estimate. However, yield reports from producers continue to run much higher than they were expecting. Analysts put soybean production approximately 40 million bushels larger than the last USDA estimate.
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Export sales for soybeans as of the end of September are currently 71% of the USDA total yearly target. This would suggest USDA would likely raise their soybean export number on the November report.
South Korea has issued a tender to buy 140,000 tonnes of corn and 60,000 tonnes of feed wheat.
The Energy Dept. released ethanol production numbers yesterday which were above last year and now puts corn for ethanol usage pace above the USDA’s target for the year. The EPA decision on mandate will be very important to overall corn usage in 2013/14.
The economic calendar is filled with reports today. The focus will be the US Non-farm payroll results where the expectation is for a gain of 185,000 jobs while holding unemployment steady at 7.3%.
Cattle slaughter is running 3.6% below same period a year ago. Packer margins have deteriorated as wholesale beef has struggled to firm up. The Greeley, CO plant is open and operating as workers and management work out a contract. Beef cutout values were higher on Monday with choice up 2.00 and select up 1.67. The CME feeder index was set at 164.81, up 4.89 from last report.
Pork production continues to trend higher and should continue into mid-November. There is talk that producers have held back some inventory during the USDA shutdown. Pork cutout values were up 1.35 on Monday.
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Markets as of 5:00 AM
- Dec Corn +0
- Nov Beans -10 1/2
- Dec Wheat -3 1/2
- Dec Cattle +.15
- Dec Hogs +.37
- Dec Dlr +.05
- Dec S&P -1.00
- Nov Crude -.33
- Dec Gold -3.60
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