Investment Funds Recognize Cheap Grains
Feb 16, 2017
Good Morning! Paul Georgy with the early morning commentary for February 16, 2017.
Grain markets are lower on profit taking. The US Dollar is lower as investors look to government bonds as a safer bet. US stock markets help stocks around the world put in a strong performance.
Wetter weekend ahead for areas of Argentina. Some spots will be receiving heavy amounts but overall growing crops should benefit. Brazil growing conditions remain favorable for crop production.
Weekly export sales will be released at 7:30 am CT. Trade estimates are: wheat 300,000 to 500,000 tonnes, corn 900,000 to 1,100,000, soybeans 500,000 to 750,000, soymeal 150,000 to 350,000, and soyoil 8,000 to 30,000 tonnes.
Stratagie Grain increases forecast of European Union’s corn crop to 61.4 mmt from 61.3 mmt. They are keeping the wheat crop unchanged with last estimate at 143.8 mmt.
January NOPA crush report was a bit surprising with 160.621 million bushels crushed which was 1.5 million heavier than the trade average estimate. Gross processing margins during January were 79.95 cents per bushel of soybeans purchased, well above last year’s average of 42.75 cents.
Soybean oil stocks increase sharply due to the aggressive January crush.
Funds were estimated to have been net buyers of 10,500 contracts of corn, 11,000 contracts of soybeans and 3,500 contracts of wheat and 5,000 contracts of soymeal. They were net sellers of 4,000 contracts of soyoil.
Weekly ethanol production fell from 1.055 million barrels per day to 1.040 which is the second week of lower production. Negative margins are finally having an effect. This week’s production number is 6.7% over last year with the USDA’s goal is only for a 2.8% increase year over year.
Crude oil stocks rose by 9.53 million barrels last week when trade was expecting only 3.50 million barrel increase. Gasoline stocks outpace trade expectations.
You are welcome to join us “On the Road”. I will be in the following locations:
Feb. 22, 2017 Ainsworth, NE at the Elks Lodge, 6:00 pm
Feb. 23, 2017 St. Paul, NE at Legion Hall, 10:00 am
Feb. 23, 2017 Cozad, NE at Elks Lodge, 6:00 pm
Reserve seating contact Jim Walz 402-760-1444
Fed Cattle Exchange auction on Wednesday saw a wide range of prices with southern plains cattle bringing $119.00 to $119.25. Most northern cattle were a no sale except for a group of cattle out of IA which sold for $116.75. Overall sales were about $1.00 lower than last week.
Beef product is still weak making it difficult for packers to improve their negative margins.
April cattle futures are in a down trend with support at $112 and resistance at $116.65.
April lean hog futures have been very choppy, however, after Wednesday price movement the $69.00 level become critical. A close below that level would confirm a double top and project an additional $4.00 to $5.00 selloff. The bull will need prices to retest highs within the next few days.
Cash hog trade remains hot as demand is greater than supply. Product demand for hams and bellies has been the supportive factor.
Dressed beef values were lower with choice down .02 and select down .10. The CME Feeder Index is 128.43. Pork cutout value is up .10.
Give us a call with any questions - 800-262-7538.