Good Morning! Paul Georgy with the early morning commentary for January 26, 2015 at 5:15 am.
Today’s Traders Focus: Cattle on feed results, FOMC meeting results, reaction to Greece election.
Grain markets are mixed in narrow trading ranges. The US Dollar is higher as the Euro currency falls to new lows. March crude oil falls below $45.00 per barrel.
Allendale’s 2015 Ag Leader Conference begins tomorrow afternoon. Sign-up today and receive 2 bonus webinars. Click here for more details.
“Currency wars” continue to increase competition for US grains mostly in wheat. World buyers are now going to Western Europe to make purchases as the weaker Euro provides a much cheaper value than US wheat.
Drew Lerner from World Weather Inc. says “A favorable weather pattern is expected nationwide over the next two weeks. There will still be some drier biased tendencies in the far northeast, but most other areas will get timely rainfall. The precipitation will be quite supportive of general crop development and planting and establishment of second season crops.” You will get his full year outlook by attending the Ag Leaders Conference on Wednesday afternoon. His presentation will be on Wednesday, with no recordings available.
Weekly export sales showed the large buyers were some of the United State’s old customers, such as Mexico, South Korea, Japan and Taiwan. The question is did they buy enough to fill their needs until South American harvest comes on line? The strength in the US Dollar makes other sources more competitive if available.
Soybean exports have been hit with switching to SA because of Brazil’s new crop supplies and cheaper freight rates due to crude oil price declines.
Managed futures reduce long positions in corn last week by 7,593 contracts to 197,018. They were also significant sellers in soybeans, reducing longs by 22,059 to leave them net short 7,539 contracts. Funds are now net short wheat by 2,462 after reducing size by 11,892 contracts.
Update - Morning Coffee Commentary:
The Greece Syriza (anti-austerity) party won the election which raises the question of them staying in the EU or leaving. British Prime Minister David Cameron warned on Sunday that the Greek election would raise economic uncertainty across Europe. The Eurocurrency continues its race to par with the US Dollar.
Russia/Ukraine tension increases over the weekend and could have a positive effect on wheat.
The total amount of cattle in the nation’s feedlots went from 101.4% of last year on December 1 to now 100.9% as of January 1. This was slightly bullish when considering the trade’s estimate of a 101.6%. The number of calves and feeders starting their feedlot visit in December came to 1.544 million head, the smallest in five years. Compared to last year it was 8.0% smaller. It should provide a little more bullish tone as trade was expecting a 4.1% decline.
Beef cutout values ended the week lower with choice down 1.91 and select down 1.66. The CME Feeder Index is 220.45.
It is a rare occurrence for January to hold the biggest hog slaughter of the winter period. That was seen last week as packers struggle to clean up this backlog in market ready numbers. It was 4.6% larger than last year and given the weight issue, total pork production for the week ran 5.8% higher. Pork cutout values were down .32.
We would have to call livestock higher on the opening.
Markets as of 5:15 AM CDT
- Mar Corn -2
- Mar Beans -3 3/4
- Mar Wheat 1/2
- Mar Soymeal -.01
- Mar Dlr .27
- Mar S&P -7.75
- Mar Crude -.52
- Feb Gold -13.50
Technical 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 email@example.com