Livestock Gone Wild - Grains in Narrow Range
Oct 30, 2015
Good Morning! Paul Georgy with the early morning commentary for October 30, 2015 at 4:15 am.
Grain markets are quiet on the last trading day of October. Soybeans are higher with 100 deliveries against the November contract. Wheat is higher on weather concerns around the world while corn is slightly lower. The US Dollar is giving back some of the gains from earlier in the week.
Export sales for corn and wheat were above trade estimates but well behind USDA’s target for 2015/16. China buying helped boost soybean sales to just over 2,000,000 tonnes last week.
Today is first notice day for deliveries against the November CBOT contracts and there were 100 contracts delivered.
Trade will be interested in the CFTC Commitment of Traders report this afternoon as they monitor funds heavy short position in wheat.
On Thursday, it is estimated that funds were net buyers of 7,000 corn contracts and 6,000 wheat. They were net sellers of 4,000 soybean contracts.
Buenos Aires Grains Exchange estimates Argentine farmers will harvest 9.5 million tonnes of wheat in the 2015/16 crop year. Argentine wheat production was 11.75 million tonnes last year.
USDA has issued the ARC or PLC payments which are going directly into farmer’s bank accounts. This infusion of cash allows for a stronger hold of grain that has been put into farm storage. Basis bids remain strong throughout the Midwest at processors and end-users.
Oct U.S. consumer sentiment index from University of Michigan is expected to be revised higher on reduced concerns about China and U.S.
Agriculture Secretary Tom Vilsack today announced that the U.S. Department of Agriculture (USDA) is partnering with 21 states through the Biofuel Infrastructure Partnership (BIP) to nearly double the number of fueling pumps nationwide that supply renewable fuels to American motorists.
(Reuters) Average beef prices rose in grocery-store advertisements this week while average pork prices fell, according to the latest Wall Street Journal retail-meat survey. The 15-cut average for beef increased to $5.57 a pound from $5.14 last week. It rose versus $5.48 a year earlier, the Journal survey found. Grocers’ listed higher prices for some steak cuts, with increases from a week earlier for sirloin, strip, round and chuck. The five-cut average for pork prices fell to $2.96 a pound from $3.16 last week. Prices were higher than the $2.88 average a year earlier. Chicken prices increased. The two-cut average rose to $1.77 per pound from $1.70 last week. It was down from $1.99 a year earlier.
Packers have been quiet after the light trade on Wednesday. Will they be back for more cattle late today? Price structure in futures is concerning as the December contract is carrying a premium to October which expires at noon today. Having the deferred contracts at a premium suggests to cattle feeders that prices are going to get better, so let’s hold on. Trade needs convincing the heavy weight cattle are cleaned up.
Lean hogs continue to slide and are having the same dilemma as cattle did in late September. The cattle bottomed the second trading day of October when funds stopped selling. Something to watch for going into the weekend and the beginning of a new month.
Dressed beef values were mixed with choice up .79 and select down .65. The CME Feeder Index is 192.94. Pork cutout values are down 3.27.
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