Rains Beneficial As Heat Arrives
May 26, 2015
Good Morning! Paul Georgy with the early morning commentary for May 26, 2015 at 5:15 am.
Grain markets are mostly lower due to risk off bias across commodities in general. The US Dollar is sharply higher as Eurocurrency falls on Greece comments.
Update - Midday Weather:
On this afternoon’s Crop Progress report traders are expecting corn planting progress to be 92% to 94% complete with soybean plantings reaching 60%. The first crop conditions status will be released this afternoon for corn and many are expecting the Good/Excellent to be as high as 80%. With all the rain in the southern plains it is expected wheat conditions could improve. The thought is the benefit outweighs the damage done by the heavy rains.
As expected, rain totals across northern and eastern TX, OK and southeastern KS were heavy with 2-5 inch totals seen across most areas and isolated reports of 8 inches seen in OK over the past three days. The rest of KS and the panhandle saw amounts of .25-1.0 inch.
Weather forecasts for Russia’s Volga Valley has peaked traders interest. The rains will determine if Russia will produce 53.5 million tonnes as suggested by USDA or something closer to the 59.1 million tonnes they produced last year. Currently Russia is offering wheat at $192 per tonne for old crop (the cheapest in the world).
Labor issues continue in Argentina but most expect to see the oilseed workers settle their strike sometime this week. There is still a national strike talked about for June 9th.
Managed money funds were large sellers last week as reported on the CFTC Commitment of Traders Report. They increased their net short position by 39,820 contracts to 90,271 in soybeans, increased short positions in corn by 18,160 contracts and reduced short positions in wheat by buying 31,690 contracts. They are building net long positions in live cattle by adding 7,583 contracts.
The Eco markets will focus this week on the Greek situation after Greece’s Interior Minister over the weekend said that Greece will not be able to make its four separate IMF payments due in June totaling 1.6 billion euros. The U.S. economic calendar is rather active during this short trading week.
The USDA released the May 1 Cattle-on-Feed report during the session on Friday which allowed the trade to react to the numbers immediately. The surprise and friendly portion of the report was seen in placements. The trade was expecting a 100.9% increase year over year but the actual placement number was 95%. This was seen as supportive to the deferred contracts while the marketing’s during April were the lowest on record at 92% suggesting plenty of heavy weight cattle available in coming weeks.
Dressed beef values were mixed with choice down 1.97 and select down 1.70. The CME Feeder Index is 220.30. Pork cutout values are down 1.47.
Markets as of 5:15 AM CDT
- Jul Corn - 1/4
- Jul Beans 2 1/4
- Jul Wheat -2 3/4
- Jul Soymeal -.06
- Jun Dlr 1.01
- Jun S&P -7.25
- Jul Crude -.43
- Jun Gold -9.80
Technical Chart of the Day
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