Good Morning! Paul Georgy with early morning comments for October 24, 2013 at 5:00 am. Grain futures are slightly higher as trade waits for a bit of news. Weather forecast is for more moisture during the next week which will disrupt harvest.
Ethanol producers are responding to the very strong profit incentive with good production totals. Last week’s ethanol production was 12% over last year. Traders are now thinking that any revision by the EPA will have very little impact on USDA’s current projections. We cannot forget this year’s production is being compared to some very low production numbers a year ago.
Join us on October 29th at 8PM as we talk about the future of the ethanol industry and its impact on the corn market with Geoff Cooper from the RFA. Register here.
The USDA is expected to release the export data from the week ending Oct 3 this morning at 7:30. They will release some additional data tomorrow. Trade estimates for USDA’s weekly export sales report are: wheat 600 to 850 tmt, corn 650 to 850 tmt, soybeans 850 to 1,050 tmt, soymeal 150to 250 tmt, soyoil 10to 20 tmt.
The CFTC will release the delayed commitment of traders report over the next 2 weeks. The will be resuming their regular scheduled release on Nov 8th.
November soybean option expiration is Friday and the largest combined open interest is at the 13.00 strike. The open interest in the November soybean futures is very large going into first notice day next Thursday. This could create volatility before month end. The November futures are carrying a premium to January however trade is not expecting many deliveries.
The Argentina bread problem is reported to have escalated to riots in some areas while wheat prices have gained to over $17.00 per bushel. The Argentine new crop wheat harvest is still a few weeks away.
Iraq bought 150,000 tonnes of Australian and Canadian wheat this week.
Crude oil prices bounce after the report of supplies growing. Traders are now talking about the 95 area as a downside target for nearby futures.
Choice beef cutout values pushed through the 200 level on Wednesday when values were up 1.46. Select beef cutout value was up 1.88. Packers paid as much as 133 in TX and KS already this week. Tight market-ready cattle supplies continue to provide underlying support. December futures have resistance at 134.00. The CME feeder index is 164.59, unchanged from Tuesday.
Pork cutout values were down 2.01 on Wednesday. The December Lean Hog futures have resistance at 89 and support at 86.00.
Allendale’s Ag Leaders Webinar for October is scheduled for next Tuesday evening, sign-up today.
Markets as of 5:00 AM
- Dec Corn + 3/4
- Nov Beans – 1/2
- Dec Wheat +1 1/4
- Dec Cattle +.37
- Dec Hogs -.07
- Dec Dlr -.09
- Dec S&P +6.00
- Dec Crude +.27
- Dec Gold +3.60
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