Bargain Hunting & Trade Optimism Help Markets Rebound
Oct 01, 2018
Good Morning! From Allendale, Inc. with the early morning commentary for October 1, 2018.
Grain Market traders reacted to markets rebounding on NAFTA trade optimism and speculative bargain hunting. December corn finished last week down 1 cent, November soybeans were 1.5 cents higher for the week and December wheat dropped 13 cents. Will the new month, new quarter impact price direction? Is a NAFTA renegotiation done?
USDA Quarterly Grain Stocks shared an overall bearish report. Corn stocks at 2.14 billion bushels (2.29 billion bushels last year). Soybean stocks at 438 million bushels (302 million bushels last year). All wheat stocks of 2.379 billion bushels compared to 2.266 billion bushel a year ago. For more in-depth analysis of Friday's report, take a look at our report video.
CFTC Commitment of Traders Report showed managed money corn futures and options position increased 28,497 contracts for the week, their net position is -112,779. In Soybeans they increased 11,199 contracts, with a net position of -58,614, and wheat grew 260 contracts, for a net position of -1,119. Live Cattle increased 4,530 contracts with a new net position of 78,872. Lean Hogs gained 2,315 contracts. The net position is now 24,140.
AgRural, a Brazilian consultancy, reported corn planting ahead of schedule at 33 percent complete (26 percent five-year average).
Taiwan Trade Officials signed a letter of intent to purchase between 3.2 million and 3.9 million tonnes valued at up to $1.56 billion of Minnesota and Iowa soybeans in 2018 and 2019. In 2017, Taiwan's total soybean imports from the U.S. were 1.4 million metric tonnes.
Managed money funds were sellers in the report driven sell0ff on Friday. Traders estimate they were sold 22,000 corn contracts, 8,500 soybeans, 4,500 wheat, 4,000 soymeal, and 2,500 soyoil.
The United States and Canada reached a deal on Sunday to salvage NAFTA as a trilateral pact with Mexico, beating a midnight deadline with agreements to substantially boost American access to Canada's dairy market and protect Canada from possible U.S. auto tariffs, sources with direct knowledge of the talks said. (Reuters).
African Swine Fever found 2 more cases in Romania, now the Maryland Department of Agriculture is educating Maryland swine producers about this highly contagious disease. Maryland swine producers and pig owners are urged to be aware of the signs and symptoms of African swine fever, to report any sick pigs to their veterinarians, and to increase biosecurity measures in their operations.
December Live Hogs traded sharply higher just below the resistance level at $58.65. Next level of support remains at $53.82.
December Live Cattle closed 35 cents higher and still remain near the highs made in February and March 2018 and November 2017. Critical resistance continues to be at the $119 level and support at $116.62.
Dressed Beef Values were mixed with choice down 0.83 and select up 0.88. The CME Feeder Index is at 156.89. Pork cutout value was down -0.43.