Focus Now Directed to South American Weather
Jan 14, 2014
Good Morning! Paul Georgy with early morning comments for January 14, 2014 at 4:30 am.
Grain futures are mixed as soybeans lead the way higher. Technical buying and SA weather concerns provide support.
Traders and analysts have wrestled with last Friday’s numbers trying to justify the USDA’s largest feed and residual use in 6 years for corn during the 1st quarter. The bottom line is the residual part of the equation gives the USDA wiggle room for the rest of the year. Consensus is that the 2nd quarter usage will be below normal expectations as DDGs offset some of the corn demand with lower livestock numbers.
Now that we know USDA’s numbers, how will they impact 2014 grain prices? Register for the Allendale Ag Leaders Conference to find out.
Weather in South America is now the number one feature affecting the market. When forecasters take the rain out and add heat, the CBOT markets are likely to respond. This weekend’s rains will be very important as temps are projected to hit 100+ in some growing areas.
Sales of beans to unknown or to China are continuing to fuel the bulls until we see some cancellations.
Argentina said they will export 1.5 mmt of wheat but are giving the OK to move 500,000 now. This not what Brazil wanted to hear.
China bought 120,000 mt of sorghum to replace some of the corn that is being delayed because of GMO issues.
NOPA crush numbers will be released on Wednesday as trade estimates range from 160 to 166.5 million bushel.
Cash corn bids were down another 5 cents at elevators around the Midwest. Lines are reported to be long as farmers wait to dump grain. Soybean basis slipped, as well, as processors and elevators seem to be getting enough grain now that roads are clearing.
Beef cutout values continue to run as choice was up 1.96 and select was up 3.18. There was a group of cattle reported as trading at 141 which would be 1.00 higher than last week. Tight supplies of market ready cattle are driving the rally. Traders are concerned the cattle market could break as quick as it has rallied. Use risk protection during this volatile time.
Pork cutout values were down .88 on Monday. The backup of hogs due to holidays and weather are keeping pork supplies more than adequate. Carcass weights continue to run 4 to 5 pounds heavier than last year. Watch for a technical reversal to change trend.
Markets as of 4:30 AM
- Mar Corn -2 1/2
- Mar Beans +4 1/4
- Mar Wheat +0
- Feb Cattle +.05
- Feb Hogs +.02
- Mar Dlr +.05
- Mar S&P +1.50
- Feb Crude +.31
- Feb Gold -2.70
Chart of the Day
If you have any questions on any of our material, give us a call at 800-262-7538 or email us at firstname.lastname@example.org