Planted Acreage Data Next Week Could Provide Surprises
Jun 21, 2018
Good Morning! From Allendale, Inc. with the early morning commentary for June 21, 2018.
Grain markets are waiting for further news from the worlds largest economies on their next step in the trade wars. Will the powers meet to solve the issues before the tariffs take effect? Weather is also on traders’ minds as the US crop looks great. Will that translate into record yields? Technicals are oversold and many producers must make marketing decisions on cash contracts based on July futures. Expect choppy markets.
Weekly Export sales are due to be released today at 7:30. Trade estimates are: wheat 250,000 to 500,000 tonnes, corn old crop 700,000 to 1,000,000 tonnes, new crop 150,000 to 400,000 tonnes, soybeans old crop 300,000 to 600,000 tonnes and new crop 100,000 to 400,000 tonnes.
Weekly ethanol production rose from 1.053 million barrels per day the previous week to 1.064 million barrels per day last week. This was impressive as it is the largest weekly production since December 2017. Ethanol production was 7.5% over last year which helped push the YTD pace to now 2.5% over last year. USDA’s current goal of 5.575 billion bushels in corn for ethanol is forecasting a 2.6% year over year increase.
The U.S. Environmental Protection Agency will propose reallocating biofuel blending obligations waived under its small refinery exemption program to other refiners, in an announcement that could come as early as Friday, according to two sources familiar with the agency's plans. (Reuters)
Funds were estimated to have been net sellers of 3,000 corn, 4,000 soybean and 3,000 soymeal contracts on Wednesday. They were net buyers of 5,000 wheat and 5,000 soyoil contracts.
Brazil's National Agriculture Confederation (CNA) said disagreements between grain merchants and transportation companies regarding truck freight prices have caused export delays that have affected exports of 6.8 million tonnes of soybeans and soymeal. Brazilian Supreme Court hearing has ended with no consensus on the adoption of minimum freight prices and whether such prices should be dictated by the government.
South Africa's 2018 maize harvest is pegged at 12.991 million tonnes by traders which was a bit higher than the government's previous estimate of 12.090 million tonnes. The governments Crop Estimates Committee will release their official estimate next Wednesday.
June Cattle on Feed estimates are: On Feed June 1, 103.4%, Placed during May 95.6% and Marketings during May 105.1%. USDA will release the report on Friday, June 22 at 2:00pm CDT. Preview for June 2018 Cattle on Feed by Rich Nelson, CLICK HERE.
Fed Cattle Exchange auction had several pens of Nebraska cattle sell at 110 however there were several lots of Kansas cattle offered at 112 which did not sell. An observation; cattle offered at FCE auction were light weights with minimal days on feed. Packers and feedlots will battle it out late this week as supplies should be increasing, however, basis selling has kept feedlot current. Product is weaker lead by the select cutout values.
August futures traded through horizontal resistance of 106.65 on Wednesday but was unable to close above that level. Resistance is 108.00 with support at 103.30.
Cash hog markets remain strong as packer’s look for inventory to fill holiday commitments. Trade is expecting meat prices to come under pressure as historical trends suggest the cash markets to make highs in late June. Cash hog index is now several dollars premium to nearby July futures.
August lean hog futures were weak on Wednesday with first support coming in at 74.00 then contract lows at 72.45. Trading range resistance is 80.00. Trade war fears has pork traders on edge.
Dressed beef values were lower with choice down 1.41 and select down 1.25. The CME Feeder Index is 141.41. Pork cutout value is up .17.