CME Lowers Margins
Aug 18, 2017
Good Morning! From Allendale, Inc. with the early morning commentary for August 18, 2017.
Grain markets are seeing some position evening and likely profit taking ahead of the weekend. Outside markets continue to monitor the drama in D.C. and will also watch this morning's Michigan Sentiment report.
Allendale's 28th Annual Yield Survey, August 16-30, 2017 with results being released on September 1, 2017. You know your fields better than anyone. Help with another successful survey. Call 800-262-7538 or go to http://www.allendale-inc.com/2017-yield-survey/
Weekly export sales for the week ending Thursday the 10th reported Soybean export sales totaling 1,352,649 tonnes (453,220 old 899,429 new), over the 350,000 - 750,000 trade expectation. With the marketing year ending August 31, shipments are important to monitor as well. Shipments came to 2.060 billion as of the 10th. We estimate 100 million remaining for the month for a total of 2.160 billion. That would be just over the 2.150 current USDA estimate.
Corn sales totaled 734,191 tonnes (62,424 old 671,767 new). This was within the 400,000 - 900,000 trade expectation. We have shipped out 2.086 billion bushels of old crop corn through the 10th using the weekly FAS data set. Allendale assumes 140 million remaining this month, for a total of 2.226. That would be right on the USDA estimate of 2.225 billion.
Wheat export sales of 633,565 tonnes were reported (all current crop). That was over the 300,000 - 600,000 trade estimate. Wheat has a June 1 to May 31 marketing year so we are still focused on sales. Current sales come to 410 million bushels which is right on the 414 five year average by this point.
The weekly Drought Monitor maps were updated yesterday and showed good rainfall through the 15th. Compared with last week there were minimal changes. A small part of South-Central Iowa was upgraded from level 3 dryness, severe drought, up to level 4 (extreme).
Long-Term NOAA maps forecast above normal temps and normal precipitation over the next three months for the cornbelt. This would allow for an active harvest season.
Farm Journal Crop Tour starts next Monday and runs through Thursday. The results should be released on Friday August 25th.
CME Group has lowered the margin requirement soybeans from $2,100 down to $1,900 per contract. Wheat margins have been lowered as well from $1,400 down to $1,200. The changes will be effective with today's close.
Funds were estimated sellers of 6,000 corn contracts and 5,000 wheat in yesterday's trade. They were buyers of 6,000 soybeans, and 3,000 soyoil. This afternoon's Commitments of Traders report which will show actual fund positions through Tuesday will be interesting to see.
Active cash trade yesterday was seen at $110 in the Central and Southern Plains. There were even reports of Nebraska selling at that price today. This price is $5 lower than last week.
Actual Slaughter was released by USDA yesterday. The average cattle carcass for the week ended August 5 totaled 816 lbs, 2 lbs over last week. This is now 1.0% under last year, an improvement over the previous week that ran 1.3% under last year.
Argentina has agreed to a deal with the United States to allow U.S. pork to enter Argentina for the first time since 1992 according to Reuters News.
US pork industry looks for Q4 pork production between 2.5% and 4.0% over last year. Most are likely near a 3.0% increase. USDA is holding their estimate of a 5.3% year over year increase.
Weekly pork sales were reported at 18,348 tonnes. That was 20% over last year in the same week. Sales so far this year are 9% over last year.
Dressed beef values were lower with choice down 1.88 and select down .84. The CME Feeder Index is 145.44. Pork cutout value is up .42.
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