Harvest Picks Up Steam While Markets Hold Firm
Oct 24, 2018
Good Morning from Allendale, Inc. with the early morning commentary for October 24, 2018!
Grain Markets watched corn, bean and wheat futures slightly firm up on light technical buying and lack of farmer hedging as farmers continued harvesting their crops. Expectations of a large U.S. harvest and a lack of fresh supportive news are keeping a lid on any substantial gains during the trading session. The White House appears to have confirmed a meeting between President's Trump and Xi next month which adds some optimism to the sentiment.
Iowa Senator Chuck Grassley said the U.S. Environmental Protection Agency must act quickly to allow year-round sales of higher ethanol gasoline blends if President Trump plans to keep a campaign promise to corn farmers. Senator Grassley said "EPA ought to speed it up. Otherwise it is going to look like the President wasn't serious in his announcement".
Chinese Imports of grains plunged in September from the year before, customs data showed, hit by increasing trade tensions with the United States and high prices elsewhere. Imports of sorghum, heavily used in China to feed the country's livestock herd, fell 76.9% from the same month last year to 90,000 tonnes. Imports have been dragged down by Chinese tariffs on cargoes of the commodity from key supplier like the United States.
Russia has raised its 2018 grain crop forecast to 109 million tonnes (106 million tonnes expected), due to favorable weather for harvesting in Siberia, said the Russian minister, Dmitry Patrushev. A crop of 109 million tonnes would leave approximately 38 million tonnes of grain available for exports.
Ukraine Farmers have harvested 54.5 million tonnes of grain, a yield of 4.19 tonnes per hectare (48.7 million tonnes last year).
South American Planting Progress continues at a rapid pace. This week showed Brazilian first crop corn at 59% complete (46% last week, 52% last year, 53% 4-year average). Brazilian soybeans at 28% complete (18% last week, 19% last year, 18% average). Argentina corn planting progress at 35% complete (29% last week, 25% last year, 23% 5-year average).
Funds were relatively quiet in yesterday's trade. Analysts estimates that managed money traders bought 4,000 corn contracts, 1,000 soybeans, and 2,000 wheat. They sold 3,000 soymeal, and 1,500 soyoil.
Argentina had a trade surplus of $314 million in September, official statistics agency Indec said on Tuesday, the first surplus the South American country has posted in the past twenty months. Argentina's exports have been driven by a more competitive peso currency, which has roughly halved in value against the U.S. dollar so far this year. (Reuters)
Economic reports out today include MBA Mortgage Applications, FHFA Housing Price Index, New Home Sales, and Beige Book. Crude Inventories will also be released today at 9:30 AM CDT.
China confirms two new cases of African swine fever causing increasing concerns over pork supplies a day after two other fresh cases were reported in the southwestern province of Yunnan. 546 hogs on a pig farm in Yiyang and 268 hogs in Changde were culled after infections were detected.
Cattle Futures pulled back retreating from a two-week high hit on Monday mostly due to profit taking. Hog futures jumped higher, supported by the USDA Cold Storage report showing supplies were tighter than expected.
Dressed Beef Values were mixed with choice up 1.00 and select down 0.80. The CME Feeder Index is at 155.06. Pork cutout value was down .53.