Can the Rumor Mill Propel Grains Again Today?
Sep 21, 2018
Good Morning! From Allendale, Inc. with the early morning commentary for September 21, 2018.
Grain market traders look to see if the buying euphoria can continue in today's day session after yesterday's surprising turnaround. All time highs in the S&P 500 didn't hurt the buying mood. Demand, technicals, and money flow will all be important factors to watch today.
What is the relationship between harvest progress and corn yields? Allendale' Rich Nelson took a look and share his findings in this quick video, here.
Weekly Export Sales took some of the credit for yesterday' rally. 2018/19 corn sales were reported at 1,383,700 tonnes, above the trade estimate of 500,000 to 1,200,000 tonnes. Soybean sales came in at 917,600 tonnes at the high end of the estimated 400,000 to 900,000 tonnes. Wheat sales were also strong at 468,400. Traders were looking for 250,000 to 500,000.
Canada and the US showed small signs of getting closer to striking a deal on revamping the trilateral NAFTA by setting a cap of $1.2 trillion in annual auto trades to Canada, but Canadian sources played down talk of a U.S. quota on autos.
The Rumor Mill was spinning fiercely yesterday with all sides looking for a reason to explain the rally. Argentine export taxes, Argentine imports of US soybeans (to then go to China), China cutting import taxes and planning economic stimulus, and too much rain in the Midwest made the list. Stay tuned for which of these catch hold.
Chart traders note 3.55 1/2 as an important level on the December corn chart after yesterday's action. 8.51 1/4 is an important level of the November bean chart.
Managed money funds were thought to be big buyers in yesterday's trade. Analysts suggest they bought 28,000 corn contracts, 14,000 soybeans, 2,000 wheat, 5,000 soymeal, and 4,000 soyoil.
Cattle on Feed will be released today at 2 PM CDT. Allendale estimates total cattle on feed for September 1stat 105.7 (5.7% over last year at 11.098 million head), placements at 106.7 (6.7% over last year at 2.057 million head) and marketings at 101.0 (1% over last year for a total of 1.999 million). The average trade estimates are On Feed 105.4%, Placements 104.4%, and Marketings 100.4%.
Cold Storage will be released on Monday at 2:oo PM. We see a 556 million lb. total pork stock level for the end of August. The five-year average is 586 million lbs. Beef stocks are estimated at 481 million lbs., over the five-year average of 440.
Pork export sales were reported at 22,856 metric tonnes or 14% over last year. Year to date sales are now 6.5% over last year. Beef sales of 15,894 metric tonnes were also great to see as they were 27% over last year. Year to date sales are 19% over last year.
December Live Cattle futures traded in a tight range yesterday. Strong resistance still remains at the 119 level with key support at 116. December Lean Hog futures closed above resistance of 57.60. Traders are still waiting for an update on the containment of African Swine Fever as it is continuing to spread across Asia and Europe.
Dressed Beef Values were higher with choice up .27 and select up .73. The CME Feeder Index is at 154.56. Pork cutout value was up 0.56.