Midwest Farmers Intend To Plant Less Acres In 2018
Apr 02, 2018
Good Morning! From Allendale, Inc. with the early morning commentary for April 2, 2018.
Grain markets are reacting to the surprise drop in soybean planting intentions on USDA’s report. Chart picture closed out the month of March positive and CFTC showed funds reducing long positions. However, when doing the math on data from USDA the soybean stocks could offset the loss from acreage in new crop soybeans. Weather in US will be very important as planting season begins.
US corn planted area for 2018 is forecast by USDA to be down 2.14 million acres from last year to 88 million acres. They expect farmers to plant 1.1 million acres less soybeans than last year or 89.0 million acres. This is the first time in 35 years that US farmers will plant more soybean acres than corn.
Traders are asking the question, will Midwest farmers let land set idle when it is profitable to grow soybeans at current prices?
Technical or chart pictures looks friendly with the strong close on the last trading day of March. Look for more excitement as we start a new month.
CFTC Commitment of Traders report showed managed money funds as net sellers of 96,320 corn contracts last week to reduce long positions to 116,911. They were sellers of 21,645 wheat contracts and 11,944 soybean contracts last week. On the latest report they were net long 183,578 soybeans and net short 77,752 wheat contracts.
Trade will be looking for USDA to post Feb US soy crush at 163.5 million bushel vs. Jan at 174.5 million bushel on this afternoon’s report.
Argentina forecast will be one of increasing rainfall during the next two weeks. Concern for harvest conditions will likely evolve a little later in the month as more frequent rain and cooler conditions persist.
U.S. weather remains one of concern for fieldwork that may not advance very well during the next two weeks. Some progress is expected, but the pace will be slower than usual.
Funds on Thursday were estimated to have been net buyers of 43,000 corn contracts, 25,000 soybeans, 7,000 wheat, 10,000 soymeal and 4,500 soyoil.
China is still considering import curbs on U.S. soybeans in retaliation for moves by Washington to impose trade tariffs, U.S. Soybean Export Council Asia director Paul Burke said on Thursday, following a meeting with the Ministry of Agriculture on Monday. (Reuters)
U.S. economic markets this week will focus on any fresh trade tensions as the list of $50 billion worth of Chinese products subject to U.S. tariffs is due to be released by Friday and a busy week for Fed speakers as the market continues to assess the odds for four rate hikes in 2018 versus the Fed-dot forecast for only three rate hikes. Traders will be concerned about the Q1 earnings season which begins next week and this week's U.S. economic calendar which is capped by Friday's March unemployment report.
March 1 Hog and Pigs report was in line with trade expectations. All Hogs 103.1% (Est 103.1%), Kept for Breeding 101.7% (Est 101.5%) and Kept for Market 103.3% (Est 103.3%).
US hog industry is still in expansion mode as farrowing estimates were 2.1% year/year for the March - May period and June - September at 1.4%. We assume that if the survey was taken today, instead of around March 1, they would be curtailing these numbers due to prices now below breakeven.
Managed money funds were net sellers in live cattle futures of 21,658 contracts reducing their net long positions to 48,759. They were also sellers in lean hogs of 3,411 contracts reducing net longs to 4,618 contracts.
Live cattle futures closed down sharply on Thursday and will have expanded limits today. Open interest in cattle futures was down 493 contracts after Thursday session.
June live cattle futures had a large trading range on on Thursday closing at levels not seen since April 12, 2017. Technical support crosses at 100.00 with resistance at 107.00.
Dressed beef values were mixed with choice up .04 and select down .99. The CME Feeder Index is 136.21. Pork cutout value is up .65.
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