Pro Farmer Senior Markets Editor
From Pro Farmer
Updated as of 7:00 a.m. CT
Update on export sales pace... With USDA raising the soybean export forecast by 50 million bu. and
lowering the corn export forecast 50 million bu. from last month, I thought it would be a good time to provide an update on how exports were stacking up compared to
the pace needed to reach USDA's forecast. USDA left their wheat export
forecast unchanged in Monday's Supply & Demand Report. The following
statistics signal USDA's corn export forecast is still too high.
Corn: With 33 weeks left in the 2008-09 marketing year, total corn
bookings are running 50% behind year-ago levels. USDA projects corn
exports in the current marketing year to drop 28.2% from the previous year
to 1.75 billion bushels. This signals USDA's export forecast is still
high, although there is still a lot of the marketing year ahead. USDA
reports total bookings as a percent of total exports are 48%, which is
behind the 5-year average pace of 57% for this time of year and well
behind last year's pace of 71%.
Soybeans: With 33 weeks left in the 2008-09 marketing year, total
soybean bookings are running 2% over year-ago levels. USDA projects
soybean exports for 2007-08 to be 5.3% below last year at 1.10 billion
bushels. This pace signals USDA's export forecast may be a little bit too
low, but once South American supplies become available, our export pace
will decline. USDA reports total bookings as a percent of total exports at
74%, which is in line with the 5-year average of 73%.
Wheat: With 20 weeks left in the 2008-09 marketing year, total wheat
bookings are running 26% behind year-ago levels. USDA projects wheat
exports in the current marketing year to decline 20.9% from the previous
year to 1.0 billion bu., signaling USDA's export forecast could be a
little bit too high. Total commitments as a percent of total exports are
running at 81%, which is in line with the 5-year average of 82%.
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Opening calls. These calls originate
more than three hours before the open -- use caution, things change:
Corn: 8 to 9 cents higher. Futures were higher overnight on short-covering.
Futures closed mostly around a penny lower, which was a mid-range close. Futures
saw two-sided trade, but upside potential continues to be limited as traders
have Monday's bearish USDA report on their minds. Yesterday's poor showing
in the weekly export sales report contributed to early losses. Futures corn
is "pausing" (at least for now) around the $3.60 level as traders
reevaluate positions. A drop below $3.50 could trigger a fresh round of sell
Soybeans: 14 to 15 cents higher. Futures were higher overnight on
spillover from yesterday's gains. Futures closed 20-plus cents higher yesterday
on a combination of strong weekly export sales and South American weather
concerns. March soybeans finished below the $10 level to post a mid-range
close. A close back above $10 would signal a return to the January high of
$10.60 1/4. Support lies at this week's low of $9.57 3/4.
Wheat: 7 to 8 cents higher. Futures were higher in overnight
trade amid short-covering. Chicago wheat closed mostly 4 to 5 cents lower
yesterday on a disappointing weekly export sales report. March Chicago wheat
posted a narrowly traded inside day on the charts. Violation of support at
this week's low of $5.60 1/2 could trigger a round of sell stops to extend
the decline from the December high.
Cash cattle expectations: $1 to $3
higher. Very light cash cattle trade was seen at higher prices Thursday,
but most Plains feedlots haven't pulled the trigger on making sales yet. Active
trade is expected in the $85 to $87 range today, which would be $1 to $3 higher
than last week. Cattle futures trade could have the final say on cash cattle
Futures call: Steady to firmer. Futures are called to open steady
to firmer on spillover from yesterday's gains, as traders expect higher cash
trade to materialize today. February live cattle are trading in line with
last week's cash trade, which opens additional near-term upside potential
if the cash market can see active trade at higher levels. Resistance lies
at this week's high of $84.90 and extends to the January high of $89.10.
Cash hog expectations: Steady to
lower. The average pork cutout value was a nickel higher Thursday to stop
a recent price plunge in the product market. But the minuscule uptick in pork
cutout prices won't help packers ailing cutting margins, which are deep in the
red. Cash hog bids are expected to be steady to lower across the Midwest today
as packers have this week's slaughter needs covered.
Futures call: Mixed. Futures are called mixed amid spreading, but concerns about near-term cash direction are expected to pressure most contracts. February hogs are now trading at just a $2 premium to the
index, which is much more in line. However, the near-term cash outlook is
bearish given red ink packers are dealing with.