Funds are Driving the Excitement in Grains

Published on: 12:01PM Mar 01, 2018

Good Morning! From Allendale, Inc. with the early morning commentary for March 01, 2018.  

Grain market traders are dealing with weather in South America which is causing crop size to decline there and large supplies in US. The next month will provide a lot of chatter about size of Argentina’s crops and how many acres the US farmers will plant in 2018.

US Dollar has forged through overhead resistance putting in a double bottom formation which now is suggesting the rally could carry another 200 points.

Allendale's Annual Planted Acreage Survey is underway, and we will gather data through March 9th. The results will be released on March 14. Report data online Click Here or call 800-262-7538.

Weekly Export Sales report will be released at 7:30 am CST. Trade estimates are: corn 1,000,000 to 1,400,000 tonnes, soybeans 400,000 to 700,000 tonnes, soymeal 100,000 to 300,000 tonnes, soyoil 10,000 to 40,000 tonnes and wheat 200,000 to 500,000 tonnes.

Ethanol production fell from 1.068 million barrels per day to 1.044 in the most recent week. However, production is at 2.5%, ahead of USDA’s whole-year goal of a 1.6% year/year increase.

U.S. Agriculture Secretary Sonny Perdue says that he and President Donald Trump support the nation's biofuels policy. "I can tell you Trump stands with corn farmers, biofuel farmers and the RFS," Perdue told an audience at the Commodity Classic in Anaheim, California, "I stand with him and with you."

Funds were aggressive buyers in corn for the 3rd day this week. They were estimated to have been net buyers on Wednesday of 17,500 corn contracts, 10,000 soybeans, 20,000 wheat and 6,000 meal contracts. They were thought to have net sellers of 3,500 soyoil.

USDA’s monthly report on oilseed crushing’s will likely show 173.4 million bushels, of soybeans were processed in January, according to the average forecast of eight analysts in a Reuters survey. The report will be released this afternoon at 2:00 pm CST.

Cash sources are reporting US Gulf and Brazil soybean premiums are rising.  US meal is no longer competitive with Argentine offers.

U.S. Department of Agriculture has issued grower and grain exporter guidelines to reduce weed seeds in U.S. soybean shipments, after China tightened import specifications for soybeans.

Fed Cattle Exchange reported 1 out of 5 pens of cattle sold at 126.00 on Wednesday. Packers and feedlots are in a standoff as feedlots try to resist lower bids.

April live cattle futures closed at the low end of Wednesday’s trading which makes the 122.00 level a key support level. Funds have been building long positions in cattle over the last several months. A close below 122.00 could cause the bullish funds to trough in the towel. Something to watch going into the weekend.

Cash hog markets remain under pressure as pork cutout values are eroding packer’s margins. Seasonally we have a few weeks before retailers turn buyers of hams for Easter features.

April lean hog futures contract is leading the slide after breaking chart support and closing on the lows made on Sept 14, 2017. The next level of support is 65.00, not seen since August of 2017.

Dressed beef values were higher with choice up .51 and select up .31. The CME Feeder Index is 147.94. Pork cutout value is down 2.09.

If you have any questions on any of our content, give us a call at 800-262-7538 or [email protected]