Is 2013 Another 2003 for soybeans
Sep 04, 2013
Good Morning! Paul Georgy with early morning comments for September 4, 2013 at 5:00 am. Grain futures are lower on profit-taking led by the soy complex. Outside markets are lower on a risk-off trader attitude.
Weather models continue to conflict with the GFS adding more rain and cooler temps in the 1 to 10 day period for parts of the cornbelt. The Euro and Canadian models are dry and much warmer with a ridge moving back over the cornbelt. Traders are worried about soybean yields and how much more stress the crop can take.
The USDA reduced the G/E rating in soybeans by 4% to 54% compared to 55% for the 5 year average. They reduced the corn by 3% for the week to 56% G/E which compares to 55% for the 5 year average. IA corn and soybean crops are rated 25% and 24%, respectively, in the poor to very poor category.
The 2003 soybean yields continued to decline into harvest and at the same time South America had production problems. In 2013, South American production is expected to nearly offset the lost production in the US. More details can be found Allendale’s Weekly Strategy Session.
Allendale will be releasing the results of the 24th Nationwide Producer Yield Survey at 7:30 this morning. The survey had data from 34 states and what Rich Nelson our Chief Strategist terms as "valid" data coverage from 12 of the top corn and soybean producing states. You will be able to view a discussion of the results presented by Rich in the "Morning Coffee" YouTube video. Thanks again for all your help.
A Brazilian AG Ministry official suggests China will approve Brazilian corn imports before year end.
Egypt is tendering for milling quality wheat for late Oct delivery. Due to pricing differences between US and Black Sea, wheat traders feel it unlikely US will get any of the business.
With harvest just around the corner for early planted crops, corn basis is mostly steady but bean basis has dropped in many locations. There have been more corn yield reports out of the mid-south at 230 to 260 bushel per acre.
Congress will be back in Washington on Monday. Senator Menendez says he will have a resolution prepared by Tuesday evening. Trader’s attitudes will be impacted by the vote.
Seasonal analysis suggests pork price declined 13 out of last 15 years by an average of 9.2%. Poultry producers are gearing up for cheaper feed cost as they increase egg sets. Due to the short time it takes a chick from hatch to market it will create increased competition for beef and pork at the retail counter. Pork cutout values were up .53 on Tuesday. Beef cutout values were mixed with choice up.43 and select down .74. The CME feeder Index was .78 to 156.10.
Markets as of 5:00 AM
- Dec Corn -5
- Nov Beans -20 1/4
- Sep Wheat -3
- Aug Cattle -.17
- Aug Hogs +.45
- Sep Dlr -.08
- Sep S&P -2.00
- Oct Crude -.82
- Oct Gold -7.20
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