Wheat Conditions Fall In Top States
Apr 08, 2014
Good Morning! Paul Georgy with early morning comments for April 8, 2014 at 4:30 am.
Grain futures are mostly lower in a quiet overnight session. Traders are concerned about three factors: weather, USDA Reports and Ukraine’s stability.
Weather is a factor as we go into planting season. Get Allendale’s Meteorologiical view by clicking here.
The USDA delayed the weekly crop conditions report until this afternoon at 3:00 pm central time. Kansas, OK and TX did release their respective state wheat conditions. Kansas the largest wheat producing state’s good/excellent went down from 32 to 29% while the poor to very poor increased from 25 to 27%. Oklahoma’s rating went from 17 to 15% in good/excellent and the poor to very poor were up 4% to nearly 50% of the state’s crop. Texas has only 13% good/excellent with poor to very poor at 61%.
The civil unrest in 3 of the Ukraine’s eastern cities is cause for wheat to find support going into the USDA report tomorrow.
Russia’s oil company Gazprom has raised energy costs for Ukraine by nearly 80% in a week.
Next Monday we should get the first corn planting progress report from USDA. The 5 yr. average is 7% done on corn.
Soybean prices in South America are about $52 per mmt cheaper than US. That price difference, even with $15 per tonne shipping, is an incentive for soybean imports into the US.
With Chinese crush margins now positive it seems less likely to see cancellations.
The Supply and Demand report on Wednesday will be directed to old crop ending stocks. Corn ending stocks are expected to be lowered due to exports and ethanol production. Soybean ending stock are potentially more explosive as exports are already well over target with tight supplies. Possible adjustments in soybeans could come in exports, imports or production. Stay tuned to Allendale research for report results.
Beef cutout values slide again with choice down .53 and select down 1.62. Packer margins are in the red as they pull contracts and showlists increase. Recent placement data suggests fed cattle inventory should improve into June. The CME Feeder Cattle Index is 178.42.
Lean hog futures are being moved by spreaders. Pork cutout values are down 1.14. Retailers are finishing up with pre-Easter purchases which could weigh on product until we kick-off the cookout season. Traders are concerned about the high price of beef and pork stifling demand. Listen to Allendale’s weekly research meeting.
Markets as of 4:30 AM
- May Corn -1 3/4
- May Beans +1 3/4
- May Wheat -3 1/4
- Jun Cattle +.27
- Jun Hogs -1.10
- Jun Dlr -.24
- Jun S&P +1.25
- May Crude +.81
- Jun Gold +15.00
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