Early Morning Profit Taking Starts the Day a Little Weaker
Mar 25, 2014
Good Morning! Steve Georgy with early morning comments for March 25, 2014 at 4:35 am.
Grains are finding some profit taking after a strong finish yesterday.
The Ukraine and Russian tensions continue to escalate as Wheat and corn find more support from the unknown. It is unclear as to how the acreage situation could play out this year in that region. The major growing areas around the Black Sea region start planting corn in April and May and wait a little longer for wheat. Is this situation potentially more bullish for corn instead of wheat? We know wheat has seen more strength from this over the last several weeks as corn continues to fight the domestic battles of having a big carryout number.
Planting intentions report as well as quarterly stock number will be released next Monday and could be the primary focus as we move though this week. Most analysts are projecting corn acres to be around 92 million acres but we feel the quarterly stock numbers may come in bearish due to the "feed and residual" category. USDA may have to come clean about the significant increase in feed stock usage for the first quarter. Our biggest concern for this report will be bean acres. Most analysts are projecting 83 million acres or better. That is a record amount of acres and could put next year’s carryout near 400 million with trendline yields. Beans have found strength the last few weeks but it is hard for us to imagine continued strength as we get close to this report.
We continue to hear that cargoes of Brazilian beans continue to be pointed in our direction and could see more shipments as the spread between US beans and Brazilian beans continue to widen.
Cattle once again managed to fade the Cattle on Feed report that was out last Friday. We are coming into a timeframe where we typically see cattle prices decline coming into summer due to the increase in slaughter numbers. The cash markets are strong but box beef continues to climb and keep strength in this market as well. Choice was up .96 with select up 2.27 yesterday.
There was profit taking in the hog market as we saw the PED number drop for a second week. As temperatures warm up it seems it is helping to control this virus for now. Cutout values were up .14 yesterday to 131.64.
Markets as of 4:35 AM
- May Corn -2 1/2
- May Beans -5 1/2
- May Wheat -5 1/4
- Apr Cattle -.15
- Apr Hogs -1.60
- Jun Dlr +.11
- Jun S&P +3.25
- May Crude +.26
- Apr Gold +3.60
Chart of the Day
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