Can Wheat Hold Uptrend Support?
Apr 10, 2014
Good Morning! Paul Georgy with early morning comments for April 10, 2014 at 4:40 am.
Grain futures are lower on follow-through selling and profit taking.
USDA provided a few surprises, one of which was a sharp decline in corn and bean stocks. All details of report and a YouTube commentary by Rich Nelson, Allendale’s Chief Strategist can be found here.
Weather now takes a more important role in grain price fluctuations. Warmer temps are headed into the Midwest but southern areas could be getting more rain which will stall planting progress.
On Monday, we are expecting to get the first planting progress numbers for corn. Average for that date is 7% planted.
This week’s ethanol production report was a little surprising. In last week’s report, we saw that producers were responding aggressively to profit signals. EIA ethanol production was down to 896,000 barrels vs 920,000 barrels last week while stocks are up to 16.4 vs 15.9 last week. Given the sharp drop in ethanol prices in the US, exporters shipped more than 3 times as much as previous week.
Weekly export sales will be released later this morning at 7:30. Trade estimates as accumulated by Reuters:
Trade estimates Trade estimates
For 2013/14 for 2014/15
Corn 700,000-900,000 0-200,000
Soybeans 0-150,000 100,000-300,000
Soymeal 100,000-250,000 0-150,000
Soyoil 0-30,000 0-10,000
Wheat 250,000-375,000 150,000-300,000
Argentina’s Rosario grains hub will be brought to a standstill today for a 24-hour strike as port workers and truck drivers plan to protest high inflation.
The USDA’s Foreign Agricultural Service attaché said Canada’s planting of wheat, barley, oats and corn will decline in the 2014/15 after slow rail transportation to market created burdensome stockpiles of the commodities this year.
Russian President Vladimir Putin threatened Wednesday to start charging Ukraine in advance for vital gas supplies. Russia continues to pressure Ukraine’s fragile economy. More finger pointing between Moscow and Washington is keeping a tense situation elevated. Traders are very concerned about spring planting and production caused by shortages and civil unrest.
The lean hog futures shook the tree on Wednesday. After being limit down, they traded limit up. Chart watchers are looking at yesterday’s action as positive after prices made nearly a 50% retracement from recent sharp rally. Pork cutout values are down 2.89.
Cattle trade is still in a stand-off. Traders are expecting a steady lower cash trade this week. The discount of futures to cash remains supportive for near-term. Weaker corn prices are providing buying interest in feeder cattle. Beef values were lower on Wednesday with choice down 1.53 and select down 1.74. The CME Feeder Index is 178.74.
Markets as of 4:40 AM
- May Corn -2 3/4
- May Beans -10
- May Wheat -2
- Jun Cattle -.10
- Jun Hogs -1.00
- Jun Dlr -.03
- Jun S&P -5.75
- May Crude -.16
- Jun Gold +16.3
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