Grains Deal With Fear Ahead Of Reports
Jan 11, 2018
Good Morning! From Allendale, Inc. with the early morning commentary for January 11, 2018.
Allendale Ag Leaders Conference Series
Allendale’s 30th Annual Outlook Series, January 23, 24 and 25th Register Here.
How Will La Nina Impact Crops in 2018? By Drew Lerner Jan 23rd (no recording)
High Yields the New Normal? By Rich Nelson Jan 24th (will be recorded)
Are We in For a Bull Ride in 2018? By Ryan Ettner Jan 25th (will be recorded)
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January 29, 1:00 – 3:00 pm, Claremont IA. Sponsor: Allendale Risk Management, Inc.
February 6, 7:00 -- 9:00 pm, Highland IL. Sponsor: First Mid-Illinois Bank & Trust
March 8, 10:00 – 3:30 pm, Riverside IA. Sponsor: Hills Bank and Trust Company
Grain Markets are testing support levels as traders consider the “what if’s”. Can USDA give us a really bearish report? Weather forecasts for South America are providing a 75 to 85% rain coverage this weekend which would be beneficial for growing crops. Historically grains have a tendency to expand their trading ranges after the release of the January reports.
Weekly Export Sales will be released at 7:30 this morning. Trade estimates are: wheat 250,000 to 450,000 tonnes, corn 350,000 to 650,000 tonnes, soybeans 500,000 to 850,000 tonnes, soymeal 75,000 to 250,000 and soyoil 8,000 to 22,000 tonnes.
CONAB, Brazil’s Agriculture Agency will release 2018 production estimates this morning. USDA will release reports on Friday morning at 11:00 am CST.
Ethanol production for the period of December 29 – January 5, totaled 996,000 barrels per day. That was 5.1% under last year in the same week. Year to date production pace is still very strong at 3.4% over last year, which is over USDA’s most recent whole-year goal of 1.6%. USDA could still increase its corn for ethanol goal on Friday.
US Ending Stocks for the January Supply and Demand report could provide the largest surprise to traders. Average estimates are .959 billion bushels for wheat, 2.431 billion bushels for corn, and .472 billion bushels for soybeans. Allendale’s Rich Nelson suggests ending stocks for soybeans could be a surprise due to the poor export sales pace. USDA could also could adjust corn stocks due to export, ethanol demand, yields and/or harvested acreage.
Winter Wheat Seedings are estimated at 31.107 million acres which is almost 1.5 million acres less than last year.
Funds were thought to have been net sellers in soybeans of 9,000 contracts on Wednesday. They were net sellers of 2,000 corn and net buyers of 2,500 contracts in wheat.
Economic Traders will be watching for the results of Jobless Claims and PPI later this morning. Friday morning also has trader’s expectations looking for more positive news from several eco reports.
Fed Cattle Exchange auction offered 711 head yesterday of which 401 sold at 119.00. Cash cattle trade is mostly finished for the week with 120 paid by packers.
Goldman Roll is winding down however bear spreading the February contract is still in play.
February live cattle should find support at 115.00 level with resistance near 120.00. The discount of futures to cash should become more of a factor when the roll is complete.
Lean hog futures were hit with profit taking and technical selling on Wednesday. The large outside day reversal pattern on the chart becomes import to the keep the prices moving higher. Support in the Feb contract is near 71.00 with resistance at 73.67, Wednesday’s high.
Dressed beef values were lower with choice down .43 and select down .46. The CME Feeder Index is 151.57. Pork cutout value is down .08.
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