Political Unrest Sends Markets Higher
Mar 03, 2014
Good Morning! Paul Georgy with early morning comments for March 3, 2014 at 4:45 am.
Grain futures are sharply higher. The tension between Russia and Ukraine has traders concerned that exports out of the Black Sea Region will be disrupted. Weather conditions in Mato Grosso and lack of cancellation confirmation is providing fuel for the buying.
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The 2014 crop insurance prices are set and the soybean to corn ratio is just below 2.50 to 1 which we have not seen since 2008. Now that we have flipped the calendar to March, planted acreage estimates will become very import. Given acreage coming out of CRP and the prevent plant acres of last year, many are expecting more than the 78.5 million acres of soybeans that USDA had in their Ag Outlook.
Managed Money Funds increased their long positions in corn and soybeans by 42,264 and 7504 contracts respectively. They also decreased short positions in wheat by 14,091 contracts and still hold a net short position of 20,311 contracts.
Soybean sales and shipments are being monitored closely by the trade. Currently the US has 7.4 mmt of unshipped soybeans. There is approximately 3.3 mmt sold to China which is nearly double from last year.
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The $12 rally in cash hogs over the past two weeks suggests packers are pretty much chasing after every single hog they can find. They want to get enough numbers lined up before market ready numbers fall off the PED cliff. Pork cutout value is up 2.21.
Cattle slaughter was the tightest during third week of February with 539,000 head. Last week slaughter ran 567,000 head. Rich Nelson, Allendale’s Chief Strategist, believes slaughter could be up to 590,000 by the end of April and around 650,000 for June peak. Beef cutout values end the week on a firm note with choice up 3.92 and select up 4.12. The CME Feeder Index is 171.03. Early calls for the livestock opening would be steady higher.
Markets as of 4:45 AM
May Corn +17 3/4
May Beans +20 3/4
May Wheat +3 1/2
Apr Cattle Steady-Higher
Apr Hogs Steady-Higher
Mar Dlr +.12
Mar S&P -17.00
Apr Crude +1.45
Apr Gold +23.60
Chart of the Day
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