Good Morning! Paul Georgy with the early morning commentary for January 28, 2015 at 5:15 am.
Today’s Traders Focus: FOMC Meeting results today, Grain traders waiting for new catalyst to move market. Don’t miss Drew Lerner’s Presentation and 2015 Growing Season Forecast at the Allendale Ag Leader’s Conference this afternoon, details.
Grain markets are slightly lower as weather in South America stays supportive for crop growth. Crude oil falls to recent lows while the dollar consolidates ahead of Fed Meeting results.
Allendale's Chief Strategists, Rich Nelson is not as bearish as some analyst for corn in 2015. He sees less acres of corn being planted compared to last year and when adding less yield or trend yield you have less total production. Ending stocks for corn could drop to 1.4 billion bushel. Rich is not bullish just less bearish than what many in trade is touting. Weather during the growing season in 2015 will be extremely important. You can listen to the complete presentation plus technical analysis and strategies for 2015 by going to www.Allendale-inc.com.
Funds are estimated to be net sellers of 5,000 soybean contracts, 4,000 corn contracts and 1,000 soymeal contracts.
Poultry producers in the southeast suggest they are using more meal and less DDGs. They are giving the reason meal is much cheaper than a year ago and DDGs are still 130% of corn. Certainly could be a reason for strength in nearby meal.
CONAB (Brazil’s USDA) will update production on Feb 12th.
Update - Morning Coffee Commentary:
Brazil exporters have started loading vessels with new crop soybeans which is a few days earlier than last year. Mato Grosso soybean harvest is advancing faster than last year as reports are saying farmers are 7.7% complete verses 5.8% last year.
China continues to cancel US purchases and switch to South America. Allendale is concerned that soybean exports may not achieve USDA goals for 2014/15.
March corn futures contract have important support at 3.78 which is the 100 day moving average.
U.S. regulators have given the go-ahead for Argentina's biofuel makers to qualify for U.S. biofuel credits, potentially making it more attractive for South American exporters to sell into the U.S. market and potentially pressuring local prices. (Reuters)
The U.S. pork and chicken industries expect large export gains if international trade agreements are finalized, prompting their support for renewing trade promotion authority (TPA) legislation.
According to customs data, China imported 56,233 MT of pork in Dec 2014 that rose 28.86% month on month and rose 7.08% year on year. China's pork imports declined 3.25% year on year to 564,337 MT in 2014.
Bargain hunting and just the lack of sellers allow live cattle futures to rally on Tuesday. Meat product movement has been disrupted because of the east coast snow storm. Beef values fell sharply with choice down 3.71 and select down 4.53. The CME Feeder Index is 215.36.
Large slaughter supplies of market ready hogs combined with weak demand has traders selling rallies in futures. Pork cutout value is down 2.86.
Markets as of 5:15 AM CDT
- Mar Corn -1
- Mar Beans -2 1/2
- Mar Wheat -3 1/2
- Mar Soymeal -.4
- Mar Dlr .07
- Mar S&P 3.75
- Mar Crude -.77
- Feb Gold -1.00
Technical Chart of the Day
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