Export Pace 'Checkup'

August 28, 2008 07:00 PM
 

Julianne Johnston Pro Farmer Senior Markets Editor


From Pro Farmer

Updated as of 7:00 a.m. CT

Old-crop corn/soybean export tallies may be a bit too high... With just one week left in the export sales reporting period for corn and soybeans, we wanted to provide an update on how exports were stacking up. The following statistics signal USDA's corn and soybean export tallies are just a little bit too high, especially considering net sales reductions have been reported for the last three weeks.

  • Corn: With just one week left in the 2007-08 marketing year, total corn bookings are running 10% above year-ago levels. USDA projects corn exports in the current marketing year to rise 14.1% from the previous year to 2.425 billion bushels. This signals USDA's export forecast is just a little bit too high. USDA reports total bookings as a percent of total exports are 101%, which is behind the 5-year average pace of 104% for this time of year.

  • Soybeans: With just one week left in the 2007-08 marketing year, total soybean bookings are running one percent over year-ago levels. USDA projects soybean exports for 2007-08 to be 2.6% above the previous year at 1.145 billion bushels. This pace signals USDA's export forecast is just a little bit too high. USDA reports total bookings as a percent of total exports at 101%, which is in line with the 5-year average.

  • Wheat: With 41 weeks left in the 2008-09 marketing year, total wheat bookings are running 7% behind year-ago levels. USDA projects wheat exports in the current marketing year to rise 20.9% from the previous year to 1.0 billion bushels. The export pace needs to improve, but there is a lot of marketing year left to make up for the deficit. Total commitments as a percent of total exports are running at 52%, which is ahead of the 5-year average of 39% and last year's pace of 47%.

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Opening calls. These calls originate more than three hours before the open -- use caution, things change::

Corn: 2 to 3 cents lower. Futures were lower overnight on spillover from yesterday's losses. Futures closed 7 to 10 cents lower yesterday, pressured by weather and weakness in the crude oil market. The International Energy Agency says they are prepared to release oil stocks to meet shortfalls from the Gulf -- if it's needed. That, combined with bearish weekly natural gas inventory data triggered a round of profit-taking in crude oil futures yesterday.

Soybeans: 3 to 6 cents lower. Futures were weaker overnight on spillover pressure. Futures remained under pressure through the day, closing 15 to 23 cents lower. Early pressure came from overnight rains, as a system brought needed moisture to many areas of the western Corn Belt and some areas of the eastern Belt. Additional pressure came from outside markets, as crude oil reversed early gains and closed weaker.

Wheat: 7 to 8 cents lower. Futures were lower overnight on spillover from yesterday's losses. Futures posted double-digit losses at all three exchanges yesterday on a combination of technicals and a lack of fresh positive news. Outside markets were also negative for the wheat pit. After opening firmer, crude oil futures softened and the dollar firmed. This combination kept buyers on the sidelines.


Cash cattle expectations: Trade begins at steady. Cash cattle trade was moderate across the Plains Thursday afternoon with the bulk of trade around $99 -- steady with the bulk of last week's trade. The steady cash prices are better than some feared given heavy pressure on cattle futures earlier this week.

Futures call: Firmer. Futures are called firmer on news of steady cash trade with last week. Yesterday, December live cattle traded in the lower half of the previous day's range and posted a high-range close. Support lies at Wednesday's low of $105.15, with resistance around the $107.50 level.

Cash hog expectations: $1 to $2 lower. Cash hog bids are expected to range from $1 to $3 lower across the Midwest as packers work to keep margins from sliding amid plunging pork values. The pork cutout value dropped another $1.23 Thursday and is down $8.35 from last Friday.

Futures call: Weaker. Futures are called lower based on technical selling, but we wouldn't be surprised if some short-covering came ahead of the weekend. But this week's price action signals traders have a very bearish stance toward the market. Nearby contracts have widened the discount they hold to the cash index, which is projected down $1.70 to $82.42.


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