Grains Benefit From Weaker Dollar
May 03, 2016
Good Morning! Paul Georgy with the early morning commentary for May 3, 2016.
Grain markets are higher as South American crop loss estimates climb. The US Dollar, crude oil and stock indices are under pressure providing a tailwind for Ag markets.
Corn planting progress is 45% complete compared to trade expectations of 47%. The 5 year average planted on this date is 30%. Soybean planting is 8% completed versus 8% expected and 6% average. Spring wheat seedings are 54% complete versus 69% last year and 39% average.
Winter wheat crop conditions were up 2% to 59% good/excellent. Trade was expecting 60% good/excellent.
Brazil ships a record 10.086 mmt of soybeans in April, compared to 6.551 mmt in April 2015 and 0.368 mmt of corn compared to 0.159 mmt during April last year. Jan-April soybean shipments were 60% greater than last year while corn shipments were 138% above April 2015.
Argentina’s state weather agency said they are estimating the loss of 9 million tonnes of soybeans in the April storms that swamped the Pampas farm belt which would be a 15 to 16 percent drop in production from the world's No. 3 exporter.
Celeres sharply lowered its forecast for Brazil's safrinha corn crop by 10 percent to 52.8 million tonnes from the previous month due to bad weather over the main growing areas.
Statistics Canada has imposed a 20-second delay for all of its major reports because they want to make sure the data hits its website at least simultaneously with media reports hitting the wires. This Friday's crop stocks report data will be released at 7:30 am CDT, plus 20 seconds.
It is estimated that funds were net sellers of 2,000 corn contracts, 1,000 wheat and 4,000 soyoil contracts on Monday. They were estimated to have been net buyers of 7,000 soybeans and 7,500 soymeal contracts.
The central bank of Australia lowers interest rates as inflation slows below target.
Livestock futures started the month of May with prices rallying. First of month buying by funds was being talked about as a reason for the strength. Cash cattle is expected to be mostly steady as product will battle with competitive meats for counter space. Bear spreading has been active in recent sessions as the attitude of feeders is to move cattle to market as quickly as possible. June futures have already exceeded normal seasonal declines from spring highs to summer lows. Chart resistance in June cattle is 119.35 and support is 114.00.
Lean hogs continue to grind higher although the cash market remains well discounted. Bull spreading seems to be the feature as cash hog supplies are expected to shrink further going into the summer. Look for spreaders to hold the key to volatility in the near-term.
Dressed beef values were lower with choice down 1.68 and select down 2.31. The CME Feeder Index is 143.43. Pork cutout values are up 1.19.
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