British Vote Shocks Markets
Jun 24, 2016
Good Morning! Paul Georgy with the early morning commentary for June 24, 2016.
Grain markets join the majority of global markets and are lower as traders scramble to find the meaning of the "Brexit" vote. The Dollar is higher adding to the pressure on grains. US equity futures are sharply lower, while gold and silver are higher.
Actual Brexit results were announced early this morning, and 51.9% of Britons who voted have agreed that their country should leave the European Union. Polling in recent days suggested Britain would remain.
Fallout from the vote won't be immediately known as the British/EU unwinding could take as long as two years according to some analysts. Immediate ramifications, however, include the announcement by British Prime Minister, David Cameron that he would resign his post by October. Expect volatility from this issue to continue.
Weekend weather is expected to bring rain to much of the US production regions, however, moisture amounts have varied in overnight maps.
Quarterly Grain Stocks and Planted Acreage reports are less than a week away. Allendale estimates corn acres at 93.399 million, soybeans at 82.976, and all wheat at 50.036. Quarterly corn stocks are estimated at 4.543 billion bushels, soybeans at .849, and wheat at .977. Average trade estimates will likely be released by the newswires today.
Are you ready for the June 30th USDA Stocks and Acreage reports? Join us June 28th in our next Ag Leaders Webinar for estimates and expectations of these important reports. Register Here.
Weekly Export Sales yesterday had corn sales totaling 1,421,062 metric tonnes (870,744 old crop 550,318 new crop). This was just over the trade expectation of 950,000 - 1,400,000.
Soybean export sales came to 1,322,190 metric tonnes (660,690 old crop 661,500 new). This was within the 1,000,000 - 1,500,000 expectation.
Wheat export sales ran 465,235 metric tonnes (462,735 2016/17 2,500 2017/18). That was within the 400,000 - 600,000 expectation.
Argentina has announced that the government, "will work out agreements to carry out selective inspections to determine the legality of seeds". This is in response to Monsanto's threats to stop selling new technologies in the country if inspections of exported seeds were not made.
Argentina's Ag ministry estimates the 2015-16 soybean crop at 58 million tonnes vs. their previous estimate of 57.6 million tonnes.
Brazil's Abiove estimates that the countries 2015/16 soy crop will be 97.3 million tonnes, down from last month's estimate of 97.9. Soy exports are estimated at 53.8 million tonnes versus last month's 54.6.
Russia's Agriculture Ministry reported that early harvest yields are coming in at 4.91 tonnes per hectare. That is over last year's 4.54 by the same date.
Australian government agency ABARE, estimates that the coming wheat harvest will total 25.4 million tonnes. Last year's production was 24.5, and USDA forecasts 25.0 million tonnes will be harvested.
Stats Canada will be out next Wednesday with their Canadian wheat acreage estimates. All wheat acreage is expected to fall to about 23.4 million acres vs. the last estimate of 23.8 million.
Commitments of Traders will be out at 2:30 PM CT and is expected to show that funds were net sellers in grains from Wednesday of last week through Tuesday of this week. For yesterday's trade, funds were estimated sellers of 13,000 corn, 12,000 soybeans, and 4,000 wheat contracts.
US economic reports out today are Durable Orders at 7:30 AM CT, and Michigan Sentiment at 9:00 AM CT. They will likely remain overshadowed by the British announcement.
Cattle on Feed will be out today at 2:00 PM CT. Trade estimates: On Feed 102%, Placed 109.2% and Marketed 105%.
Quarterly Hogs and Pigs will be out today at 2:00 as well. Trade average estimates are as follows: All Hogs 100.8%, Kept for Breeding 100.4% and Kept for Marketing 100.8%.
Dressed beef values were lower with choice down 1.62 and select down .01. Pork cutout values are down .36.
If you have any questions on any of our content, give us a call at 800-262-7538 or firstname.lastname@example.org