Bulls Need To Be Fed
Mar 12, 2014
Good Morning! Paul Georgy with early morning comments for March 12, 2014 at 4:30 am.
Grain futures are lower, led by long liquidation in soybeans triggered by fundamental news and a weak chart pattern.
There has been more talk of China rolling or cancelling soybean contracts out of Brazil and US. Crush margins in China continue to deteriorate. Crush margins in the US continue to back off with meal values on the defensive.
Farmer selling has stopped after the recent price rally however they have picked up moving grain as weather permits.
As we look ahead, the Ukraine/ Russia situation is continuing to provide support to grain futures. Traders will be waiting for the export sales numbers tomorrow morning.
The results of the Allendale Annual Planting Survey will be released tomorrow morning at 7:30. Thanks to all who shared their information to make this year’s survey a success.
Last trading day for the March CBOT grain and soy contracts is Friday March 14.
Ukraine’s Ag Minister says it is unlikely that most of Crimea will not plant spring crops due to turmoil in the area.
Rosario Grain Exchange in Argentina pegs their soybean crop at 54.7 mmt compared to a last estimate of 55 mmt. The corn crop is seen at 22.7 mmt compared to a last estimate of 22 mmt.
Brazil’s agency similar to USDA will release their estimate of the 2013/2014 Brazilian soybean crop. Most estimates are now in the 87 to 88 mmt range, down from the 90 to 91 mmt level.
Mato Grosso’s Safrina corn (second crop) is about 75% planted which is behind normal.
Wheat challenged the 200 day moving average but was unable to close above it in the May contract. Soybeans fell below chart support which suggests more long liquidation could be in the making. The May contract in corn used the 200 day average as support and closed above 4.78 on Tuesday.
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Cash hog and product markets remain strong on fear of pending tight meat supplies. Pork cutout values are up 2.59 to 117.53. Lean hog futures are under pressure this morning as the recent sharp rally is leading to some profit taking.
Beef values are higher with choice up 2.57 and select is up 1.72. Packer margins are again in the black and feedlots are looking for firmer cash trade this week. CME Feeder Index is 173.56.
Markets as of 4:30 AM
- May Corn -4
- May Beans -26
- May Wheat -4
- Apr Cattle +.25
- Apr Hogs -1.57
- Mar Dlr +.06
- Mar S&P -2.75
- Apr Crude -1.44
- Apr Gold +8.30
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