Canada Joins USMAC Trade Deal Markets Soar Higher
Oct 02, 2018
Good Morning From Allendale, Inc. with the early morning commentary for October 2, 2018!
Grain Market traders watched corn and soybean futures rally on Monday, reversing the steep losses during the prior session after the United States, Canada and Mexico reached a deal on a trilateral pact to replace NAFTA. Overnight, traders took on a subdued "Turn-Around Tuesday" approach to trade, with some profit taking noted early in the night session.
USDA Crop Progress Report showed corn conditions at 69% GTE (63% last year), soybean conditions at 68% GTE (60% last year). Corn harvest at 26% complete (16% last week, 16% last year) with soybean harvest 23% complete (14% last week, 20% last year). US winter wheat planting is 43% complete (28% last week, 34% last year).
Brazil's 2018-19 Soybean Crop to average 120.4 million tonnes, a record, according to one private analyst. In August, the crop was estimated at 119.76 million tonnes. Planting is well ahead of normal in southern South America with plenty of rains forecasted in coming weeks to provide healthy moisture.
USDA soybean crush figures for August were reported at 5.089 million tons. DDG production was reported at 2.162 million tons, an increase from last year's 2.062.
Brazil's trade ministry reports September soybean exports of 4.61 million tonnes. This compares to 8.13 million in August and 4.27 million last year. Soymeal exports were counted at 1.29 MT, a decrease from Augusts 1.46 MT. Soyoil exports were reported at 84,599 vs. August's 209,268, and corn exports came to 3,423,786 tonnes.
FCStone raised its estimate of US corn yields to 182.7 bpd, up from last month's 177.7. Accordingly, their corn production estimate was raised from 14.532 billion bushels to 14.940. Soybean yields were raised to 54.0 bpa from August's 53.8, while production increased to 4.796 bb.
Managed money funds were big buyers of an estimated 21,000 corn contracts in yesterday's trade. Additionally they bought 6,500 soybeans, 1,500 wheat, 3,500 soymeal, and 5,500 soyoil. Rich Nelson reminded us in yesterday's Strategy Session that after several weeks of big fund selling, fund buying could now be a market mover.
U.S. President Donald Trump on Monday said it was "too soon" for Washington to talk to Beijing about working out a deal on trade, even though China wants to. "If, politically, people force it too quickly, you're not going to make the right deal for our workers and for our country." (Reuters)
Economic reports are light today with Auto and Truck sales out at 1:00 PM CDT. The bigger reports, Jobless Claims, Nonfarm Payrolls, Unemployment Rate, etc. come Thursday and Friday this week.
December Live Hogs traded sharply higher closing above a strong $58.65 resistance level at $59.85. Next level of resistance at $60.55 with support at $53.82.
December Live Cattle closed 32 cents lower remaining near the highs made several times over the last year. Critical resistance continues to be at the $119 level and support at $116.62.
Dressed Beef Values were higher with choice up 1.20 and select up 1.19. The CME Feeder Index is at 157.48. Pork cutout value was up 0.97.