Trade Prepares for USDA Report
Nov 10, 2014
Good Morning! Paul Georgy with the early morning commentary for November 10, 2014 at 5:30 am.
Traders Focus: USDA November Supply and Demand at 11:00 AM.
Grain markets are quiet on light volume ahead of USDA Report. The US Dollar is giving back some of last week’s gains and crude oil bounces to near $80.00 a barrel.
History suggests the USDA will increase corn and soybean yields on this report. The question traders are struggling with is how much?
The following table is traders estimates for U.S. corn and soybean production put together by Reuters.
Avg Est. Est. Range USDA OCT
Production 14.551 14.242-14.842 14.475
Yield 175.233 171.4-178.6 174.2
Production 3.967 3.903-4.064 3.927
Yield 47.608 46.8-48.7 47.1
USDA 2014/15 U.S. grain and soybean ending stocks
Average of Range of USDA Oct.
analysts' analysts' 2014/15
estimates estimates end-stocks
Wheat 0.660 0.634-0.682 0.654
Corn 2.135 1.850-2.282 2.081
Soybeans 0.442 0.403-0.513 0.450
The USDA Weekly crop progress is out this afternoon. Corn harvest expected to be 80% complete compared to 79% average while soy harvest could be 93% complete vs. 92% average.
Weather forecasst keeps snow possibilities to the north and open harvest conditions for most of the cornbelt this week.
Meal basis is hanging tough although barge and rail lease rates seem to be eroding.
Barclays Capital says total global commodity assets under management fell to $286 billion at the end of October from $295 billion at the end of September.
Last week managed money funds were big buyers in the grains and oilseeds. They increased their positions in corn by 21,885 contracts to 163,673 net long. They increased net longs in soybeans, soymeal and soyoil by 10,000 to 14,000 contracts. They reduced short positions in wheat by 11,763 contracts.
Update - Morning Coffee Commentary:
Cash cattle ended the week 1.00 to 2.00 lower than last previous week in the Southern Plains and dressed trade was 2.00 to 3.00 lower in NE. Beef values were mixed with choice down 1.41 and select up .82. Beef demand at the retailer counter is being pushed back by the cheaper pork and poultry. The CME Feeder Index is 240.54.
Hog slaughter last week was the largest since mid-January. Slaughter ran 2.4% under last year but due to higher weights pork production was only 1.3% smaller. Pork cutout values are down .56. December lean hog resistance crosses at the 20 day moving. Support is last week’s low.
Early call is steady higher based on follow through from Friday.
Markets as of 5:30 AM CDT
- Dec Corn -1
- Jan Beans 3 1/2
- Dec Wheat -1 1/2
- Dec Soymeal 3.60
- Dec Dlr -.34
- Dec S&P 2.25
- Dec Crude 1.05
- Dec Gold -.08
Technical Chart of the Day
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