Dollar Reacts To Fed Comments
Mar 30, 2016
Good Morning! Paul Georgy with the early morning commentary for March 30, 2016.
Grain markets are near unchanged as traders wait for USDA report. The US Dollar is lower on follow through selling after dovish comments from the Fed Chairman Yellen. Equity futures are near contract highs.
The long awaited USDA Prospective Plantings report is only about 30 hours from its release. Trade is expecting an increase of 2 million acres from last year in corn and only marginal increases in the soybean planted acreage. Many are thinking the USDA will be under estimating the corn planted acreage. Planting season weather and farmers financial situation will make the difference during late April and early May.
Did you miss our webinar last night? If so, you missed a preview of tomorrow’s USDA reports, plus an in depth look at China and the macro markets with CME’s Erik Norland. Check out the recording for free, here.
Quarterly stocks may hold the key to any real excitement from the report on Thursday. The USDA will give us one number for stocks on March 1. The analysts will then have to go to work and figure out how they came up with the number. It will be on the April 12 Supply and Demand before we get the USDA’s breakdown on usage.
Corn planting progress in the Delta is 8% complete and has fallen behind the 5 year average of 20%.
Cash movement of soybeans picked up in the country yesterday with some processors lowering basis.
Brazil has been a large buyer of Argentina corn in recent weeks to fill immediate needs until the safrina corn harvest begins. Brazil’s fall harvest is set to begin in May and current projections are for a record production of 55.3 mmt.
Funds were estimated net buyers of 9,000 corn contracts, 8,000 soybeans, 8,000 wheat, 2,500 soymeal and 4,000 soyoil contracts.
Fed Chairman Yellen’s comments on Tuesday were dovish, suggesting the Fed will proceed with caution in regard to interest rate hikes. This caused a sell-off in the US Dollar.
Brazilian and Argentina farmers halted selling of their new crop soybeans due to the drop in US Dollar which had a direct correlation to lower soybean prices for them.
Hedge funds and other money managers are holding a near record long or bullish position in crude oil. They have more than double their net long positions held at the beginning of the year.
EIA energy stocks will be released today at 9:30AM CDT. The March jobs report will be released Friday, April 1st trade is expecting a gain of 208,000 jobs.
April Live cattle options expire on Friday and first notice day for delivery against the April futures begins Monday.
June live cattle had a large trading range on Tuesday closing at unchanged. Several battles going on in the cattle complex are weaker auction prices this week, stronger cutout values on good product demand and technical indicators registering overbought conditions. Seasonal charts from Moore Research Center Inc. suggest cattle have a high tendency of working lower from now into late May.
Lean hog futures continue to chop within the large price range made last Friday. Chart resistance initially crosses at 83.40 with major resistance at 84.00 in the June contract.
Dressed beef values were lower with choice down .22 and select down .79. The CME Feeder Index is 158.08. Pork cutout values are up .02.
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