Could Markets Get Wild After USDA Report?
Jun 28, 2018
Good Morning! From Allendale, Inc. with the early morning commentary for June 28, 2018.
Grain markets are trying to find parity going into the USDA report tomorrow. Headlines on trade relations will create concerns as we work through a historically volatile time of year. Manage your risk, contact an Allendale representative and share your thoughts.
Weekly USDA grain export sales data will be released this morning at 7:30 am. Trade is estimating old crop corn sales at 600,000 to 1,000,000 tonnes and new crop at 200,000 to 400,000 tonnes, old crop soybeans sales 300,000 to 600,000 tonnes, new crop 100,000 to 400,000 tonnes. Wheat sales are thought to be 250,000 to 500,000 tonnes.
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 tomorrow 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.
Funds were estimated net sellers of 4,500 corn contracts and 2,500 soymeal. They were flat in soybeans, but buyers of 5,000 wheat and 2,500 soyoil contracts on Wednesday.
Over 60 companies representing the American dairy farmers and cheesemakers in a letter asked President Trump to suspend steel and aluminum tariffs on Mexico until renegotiations of a free trade treaty is completed. They called Mexico the "largest and most reliable market" for American dairy products, and with Mexico’s retaliatory tariffs, could send buyers to EU.
Supreme Court Justice Kennedy has made plans to retire after three decades on the highest U.S. judicial body, giving President Donald Trump an opportunity to select his replacement.
Weekly ethanol production posted another increase over the previous week at 1.072 million barrels per day and the largest weekly run since December 22, 2017. Production was 5.6% over last year which puts our year to date pace at 2.6% over last year. That is right on target with USDA’s whole-year goal.
Fed Cattle Exchange offered 306 head of which all sold at 106. There was trade reported in the cornbelt at 108 to 110. Packers are buying for a short production week ahead which is making them tougher to deal with. Post-holiday demand for meat products is weighing on the mind of traders and packers. It is expected cutout values could drop quickly when packers get back in full swing.
Futures contracts are remaining at a deep discount to cash markets with an anticipated slide coming in beef and live pricing. June live cattle futures go off the board on Friday.
August live cattle futures are holding the up-trending channel support line at 101.65. Key support is still at 100.40. The gap left this week between 1004.90 and 105.50 is resistance.
USDA Quarterly Hogs and Pigs Report will be released today 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 preparing for a post-holiday battle with possible tariffs on pork and increasing hog supplies versus no tariffs and large short positions by managed money.
August lean hog futures contract is consolidating ahead of the hogs and pigs report in a range of 75.82 and 73.25.
Dressed beef values were lower with choice down 1.53 and select down .69. The CME Feeder Index is 141.78. Pork cutout value is up .25.