Corn Rating Falls More Than Expected
Jul 17, 2018
Good Morning! From Allendale, Inc. with the early morning commentary for July 17, 2018.
Grain market traders react to the latest from the USDA is US crop conditions. As hard as we have sold off over the last month, any excuse for a rally is welcome. As always, traders will watch the headlines for any new developments in US/Chinese trade talks.
Our annual Summer Outlook Conference is next week! We'll kick off the series with Drew Lerner of World Weather, Inc. and his forecast for the rest of the growing season! The complete event, including price projections and trade strategies, is July 24th through the 26th - right online. Get registered.
Crop progress numbers out yesterday afternoon were a little lower than expected for corn and soybeans. Corn was reported 72% good to excellent. Traders were expecting 74% GTE. The crop was also reported 63% silking. Soybeans were rated 69% GTE, just below the 70% expectation. Spring wheat was 80% GTE, just above the 79% estimate. Winter wheat was reported 74% harvested, an increase of 11% from last week.
NOPA Crush was reported at 159.228 million bushels for June, just under the 159.637 trade guess, but 15.3% over last year and a record crush for any previous June.
Agritel estimates Germany's wheat crop at 21.49 million tonnes which would represent at 12% decrease from last year. The estimate was made after a crop tour earlier this month.
Export inspections for the week ending 7/12 had corn exports of 1,217,233 tonnes, soybeans 635,429, and wheat 469,523. All three were about where analysts were expecting.
China's government says it has filed a World Trade Organization case challenging U.S. President Donald Trump's plan to raise tariffs on Chinese goods worth $200 billion in an escalating dispute over technology policy. China could open its economy if it wished, European Commission President Jean-Claude Juncker said on Monday, with the European Union calling on countries to avoid a trade war even as pressure mounts on Beijing over its industrial policies. (Reuters)
Funds yesterday were buyers of 6,000 corn contracts, 6,000 soybeans, and 6,000 soymeal. They were sellers of 5,500 wheat, and 3,000 soyoil.
Mexico's incoming Foreign Minister, Marcelo Ebrard stated that he is "reasonably optimistic" about US-Mexican relations over the next several years. Ebrard and the transition team are expected to participate in the next round of NAFTA negotiations.
Cattle showlist numbers were 3,500 head higher than the previous week. This is seen as neutral by traders. Last week's cash trade, however, at 110.89 (average) is viewed as supportive.
Weekly Comprehensive Boxed Beef report showed that last week end users booked 36% more product than last year for 22 day delivery. The four week average of their buying comes to 45% over last year.
Rich Nelson reminded us during our weekly strategy session that, "The 'hog cycle' used to represent the expansion/contraction issues that have long affected hog production. There is a period of losses about every four years. In current day, we could suggest that the cycle does not hold much bearing due to the amount of corporate production."
Dressed beef values were lower with choice down .38 and select down .70. The CME Feeder Index is 148.27. Pork cutout value is down .45.