Argentine Harvest Reignites Grains and Oliseeds
Apr 30, 2018
Good Morning! From Allendale, Inc. with the early morning commentary for April 30, 2018.
Grain markets are higher on follow through buying from a positive weekly close. The soybean complex is being led by the strength in soybean meal. Positive crush margins and concerns of Argentina’s inability to continue to be the world supplier of meal is providing support.
Planters continue to roll until the rains move in mid-week. The average corn planting for this week is 29% with some in trade thinking we could see a number as high as 25% this afternoon and that would be a nice jump from 5% last week. Hard Red Spring wheat planting could be 10 to 15% versus an average of 40% on this date.
CFTC Commitment of Traders report showed funds as sellers through Tuesday’s close. They were net sellers in corn of 15,367 contracts, soybeans of 22,874 and wheat of 4,575 contracts. However, since Tuesdays close, funds have been reported as large buyers in the grain and oilseed complex. Trade is already anticipating next week’s changes.
There were 10 deliveries in in corn through August 8, 2017 and 415 contracts delivered in soybeans through April 10, 2018. In HRW wheat there was 327 through April 23, 2018 and no deliveries for SRW wheat.
Funds were estimated net buyers of 12,000 corn contracts, 14,500 soybean contracts, 6,000 wheat and 9,500 meal contracts on Friday,
Oil rig count increased by 5 to 825 rigs producing in US.
U.S. economic markets this week will focus on whether the U.S. and Europe engage in a tit-for-tat trade war as Europe's temporary exemption from steel-aluminum tariffs expires today unless the U.S. grants an extension and U.S.-Chinese trade tensions as Trump administration officials late this week travel to China to see if a negotiated solution can be reached.
USDA’s weekly packer survey, noted on the Estimated Slaughter report, found fewer cattle than expected for this week went to slaughter. Trade was looking for more than USDA estimate of 623,000 head. Last week’s production of cattle was 1.2% under last year and the previous four weeks ran 3.0% over last year. USDA was projecting a 10.3% production for April. The month of April will wrap up with a 3% slaughtered and a 4 to 5% in beef production. The questions remain are the cattle really in the feedlots and if so are they being slowed down to even out a well touted valley in prices?
Managed money funds were net sellers in live cattle as of last Tuesday’s close of 6,951 contracts and net buyers of 1,887 lean hog contracts.
June live cattle futures closed 3.27 higher for the week and would expect to start higher today. The strong close and higher cash markets should provide the fire power. April futures will go off the board today at 12:00 noon.
Weekly hog production was estimated at 2.363 million head. Last week’s production would be 2.8% over last year with the previous four weeks averaging 3.6% over last year. Rich Nelson Allendale’s Chief Strategist, says “As it stands right now, hog numbers are coming in just about right on schedule.”
June lean hogs were hot with selling last week closing 4.92 lower. The pork complex is oversold, and warmer weather should help the retail demand.
Dressed beef values were mixed with choice up 1.59 and select down .16. The CME Feeder Index is 139.99. Pork cutout value is up .76.
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