Good Morning! Paul Georgy with the early morning commentary for August 13, 2015 at 5:15 am.
Grain markets are higher on a short covering recovery. The macro commodity set has settled down with the US Dollar higher, Crude oil steady and gold down.
Now what? With the USDA August report out of the way the market will go back to focusing on several issues; the weather forecast, currency wars impact on world grain values and will funds be further bail on long grain position.
Funds were estimated to have sold a net 30,000 corn contracts, 25,000 soybeans, 10,000 wheat, 12,000 soymeal and 10,000 soyoil contracts on Wednesday sharply lower price decline.
The soybean carryout was a huge surprise to the trade as the average guess was 301 million bushel and the USDA came in at 470 million bushel. The larger soybean production, and the cut in export demand by 50 million bushel had a huge impact on bottom line. The cheaper world supplies due to currency valuations are taking US demand.
USDA projects record corn yields in 6 of the top 12 corn producing states to justify their average corn yield of 168.8. In the state of Indiana, corn yield declined 11 bushels from the 20 year average and 30 bushel per acre from last year’s record. Illinois yield was down 5 bushels per acre from trend yield and 28 bushels below last record yield of 200 bushels per acre. USDA is projecting record soybean yields in MN, NE and AR.
Allendale's Annual Yield Survey will begin gathering information on Monday August 17th and continue through Friday August 28th. You will be able to go on line and fill out the survey for your farm. “Nobody knows your farm better than you.”
Weather models are coming in agreement and increasing the chances of rain across the Midwest next week. The best rain event is mid-week which could be important to determining this year’s final row crop production.
Flooding in several of Argentina's key wheat growing areas raise concerns of damage to recently planted crops and could reduce the 2015/16 harvest potential.
Weekly ethanol production bounced slightly this week, from 961,000 barrels per day to 965,000 barrels per day. This suggests a 4% increase over last year. Ethanol stocks declined and production margins improved during recent week.
Weekly export sales data will be released this morning at 7:30. Old crop estimates are: corn 50,000 to 250,000 tonnes, soybeans (-150,000) to 250,000 tonnes, soymeal 25,000 to 75,000 tonnes and soyoil 5,000 to 15,000 tonnes. New crop estimates are: corn 300,000 to 500,000 tonnes, soybeans 450,000 to 750,000 tonnes, soymeal 0 to 100,000 tonnes, soyoil 5,000 tonnes and wheat 400,000 to 600,000 tonnes.
The Farm service Agency will release the first of several prevent planted acreage data on Monday.
The EU Commission has forecast rapeseed production will fall 14.7 percent from last year's record level to 20.73 million tonnes. The drop is due to farmers reduced sowings and an early summer heatwave impacted yields.
China continues their quest in finding a way to get end-users of corn to buy government stocks rather than buying imports. They are changing the requirement for importers of distillers' grains (DDGS) and sorghum to register details of their purchases under a new system to come into effect from Sept. 1.
(Reuters) - Argentina's leading farm groups on Wednesday announced a 5-day suspension of grains sales, including wheat, corn and soy, starting on Aug. 24.
Cattle futures yesterday came under pressure late in the session yesterday mainly due to further fund liquidation prompted by sharp moves in grains, dollar and stock indices.
USDA lowered 2015 beef production by 65 million pounds but more than offset that with a 36 million pound increase for imports and a 74 million pound drop in exports.
USDA’s changes on the pork balance sheet were only slightly bearish. The 2015 picture saw no change for production which was still a large 7.6% year over year increase. Imports were raised by 14 million pounds while exports were lowered by 66 million pounds.
August hog futures contract will expire at noon this Friday.
Dressed beef values were higher with choice up 3.09 and select up .65. The CME Feeder Index is 216.83. Pork cutout values are down .69.
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