Good Morning! Paul Georgy with the early morning commentary for January 17, 2017.
Grain markets are mixed after the long holiday weekend with weather on the minds of most traders. Outside markets will continue to focus on headlines from the incoming Trump administration and Brexit details from the UK's Theresa May.
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Argentina’s Weather is said to be improving. According to World Weather, Inc., "The weekend rain event is the last in a long series of rain events. A big part of the central grain and oilseed areas are too wet today and some of the wet bias has hurt production potentials along with the drought-like conditions of early December and flooding that occurred in the south in late October."
World weather further notes, however, "A small region of important crop area has been inundated with excessive rainfall overnight centered on an area near Rosario, Santa Fe where torrential rainfall and serious flooding has occurred." These heavy rains are adding support to soybeans this morning.
Protests in the Brazilian state of Mato Grosso are blocking a major corn and soybean trucking highway and preventing shipments of grains to ports. Truckers in the region are demanding greater pay for the transport of corn and soybeans.
NOPA Crush is estimated at 162.8 million bushels for December, and oil stocks are estimated at 1.352 billion pounds for today's 11:00 AM CT report. Last year's December numbers were 157.711, and 1.407 respectively.
CFTC's Weekly Commitments of Traders report showed managed money funds were buyers of 19,805 corn contracts (now short 76,564), 1,643 soybean contracts (now long 95,890), 18,625 wheat (now short 84,968), 99,542 live cattle (now long 99,542), and 1,073 lean hog contracts (now long 53,813) through January 10th.
China will import two million tonnes of corn in the 2016/17 marketing year according to a new estimate from the National Grain and oils Information Center. This would represent a decrease of 37% vs. last year. China's Ag ministry, however, later stated that the country will only import one million tonnes of corn, and also noted that the Chinese corn production will fall by 4.1%.
Rains of two to four inches fell over the weekend in parts of the US HRW regions adding relief to areas that were in need of precipitation.
Funds were estimated to have been neutral in corn and wheat during Friday's trade. They were estimated buyers of 9,000 soybeans, and 7,000 soymeal. Traders estimate funds were sellers of 4,000 soyoil contracts.
Empire Manufacturing is the lone economic report out today at 7:30 AM CT. Traders will continue to focus on news from the incoming Trump administration ahead of this Friday's inauguration.
Record pork production will be seen this year which is not a surprise. The amount of pork left for the US consumer over after net exports, what determines your hog price, will push to the highest per capita level in 14 years.
On a seasonal basis the cattle industry should be preparing for the normal dip in supplies that happens in February and March. Rich Nelson notes, "This is why we “normally” have a seasonal rally in Q1 after the January dip in pricing (consumers paying holiday bills). This year, that seasonal is in question. The year's biggest supplies are in the summer."
Cattle Traders will weigh the impact this weekends snow/ice storms had on cattle this morning and will likely impact pricing.
Dressed beef values were higher with choice up .59 and select up .92. The CME Feeder Index is 132.03. Pork cutout value is down .60.
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