Can Grains Bounce In Spite of Another Big Crop?
Jun 27, 2018
Good Morning! From Allendale, Inc. with the early morning commentary for June 27, 2018.
Grain markets are struggling to lift their heads as the tariffs go into effect on July 6th. End of month and pre-report position adjusting will also be affecting price movement in upcoming sessions. USDA Plantings and Quarterly Stocks reports will be released on Friday.
Average estimates for Friday's very important USDA reports have been released by Reuters. Traders estimate corn stocks at 5.268 billion bushels, soybeans 1.225, and wheat 1.091. Corn acreage is estimated at 88.562 million, soybeans 89.691, and all wheat at 47.124. The Planted Acreage and Grain Stocks reports are both due Friday at 11:00 AM CDT
Stats Canada Principal Field Crop Areas report will be released on Friday, June 29. MGEX will present a webinar at 8:15 am CDT with Cliff Jamieson of DTN providing commentary. Registration and call-in information are required as follows: Register for call in at email@example.com.
Weather conditions and forecast into the first week in July across the Midwest should be ideal for producing another outstanding US crop.
Funds were estimated to have been net-sellers of 9,000 soybeans, 5,500 wheat, 3,500 soymeal and 3,000 soyoil contracts. They were net-buyers of 5,000 corn contracts on Tuesday.
USDA’s Secretary of Agriculture, Perdue says they hope to have a plan in place by fall harvest to help farmers hurt by tariff war with China. He suggests commodity credit corporation is one major tool to provide the assistance.
Brazilian consultancy, Datagro predicts Brazilian soybean area will grow to 35.9 million hectares in 2018/2019 season, sees output at 120.5 mmt. They suggest the logistical woes disrupting Brazil soy shipments situation may be aggravated as farmers continue to harvest second corn.
U.S. Environmental Protection Agency on Tuesday proposed setting a 19.88-billion-gallon biofuel blending mandate for 2019 under the Renewable Fuel Standard, in line with expectations, according to a statement seen by Reuters.
United States has told countries to cut all imports of Iranian oil starting on November 4th and is not likely to offer any exemptions, a senior State Department official said administration ramps up pressure on allies to cut off funding to Iran.
Fed Cattle Exchange has only 306 being offered at today’s auction. Cash trade this week has been light at the 108 to 109. Packers are buying for a short production week next week which is likely to put the ball in their court. Product values are weak and history suggests it will get weaker as July 4th holiday passes.
Live cattle futures traders are torn between the discount of futures to current cash prices and the probability of cash markets dropping by late July. Look for choppy trading as cash market facts play out.
USDA Quarterly Hogs and Pigs Report will be released on Thursday at 2:00 pm. Trade guestimates are: All Hogs as of June 1, 2018 103%, Kept for Breeding 101.7% and Kept for Market 103.1%.
Lean hog futures are caught up in the tariff wars as pork is a product being hit by retaliation. Managed money funds are short lean hog futures and record amounts. Historically funds do not stay net short hogs very long. If headlines change, prices could change quickly without fundamentals changing. Manage your risk.
August lean hog futures are trading near the base of a range established since early April. Support crosses near 73.00 and resistance at 77.00
Dressed beef values were lower with choice down .86 and select down .32. The CME Feeder Index is 141.75. Pork cutout value is up .82.