Good Morning! Paul Georgy with the early morning commentary for March 7, 2016.
Grain markets are higher on short covering reaction to large fund short positions. Financial markets are waiting for news out of China and ECB later in week.
CFTC Commitment of Traders report showed managed money funds were aggressive sellers. They increased their short position in corn by 69,503 contracts to put tem net short 203,837 contracts. They sold a net 59,399 contracts in soybeans. Funds added to their record net wheat short position to 107,477 contracts. Funds were buyers of 24,886 contract in crude oil.
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China’s National Development and Reform Commission also said in its report released at the opening of the full session of China's parliament that it expected total grain output to reach more than 550 million tonnes this year.
There were 19 corn deliveries against the March contract through November 5, 2015. Soybeans had 564 contracts delivered bringing the total for this month to 2,328. 6 deliveries were in CBOT wheat.
USDA’s Supply and Demand Report for March will be released on Wednesday. Trade average estimate is 975 million bushel of wheat. Last month USDA was at 966 million bushel. Corn average estimate is 1.854 billion bushel compared to last USDA estimate of 1.837 billion. Soybeans 452 million bushel compared to 450 million last month.
Funds were estimated buyers of a net 11,000 soybean contracts, 3,500 corn, 1,000 wheat, 5,000 soymeal and 3,000 soyoil contracts on Friday.
The Macro markets this week will focus on whether crude oil prices can extend their recovery above Friday's 2-month high and whether the Chinese stock market and the yuan can hold their ground amidst the 2-week Chinese National People's Congress meeting. They're watching whether the 3-week recovery in the U.S. stock market can continue and expectations on what the ECB will do at the meeting on Thursday.
Cattle futures are consolidating as cash trade holds recent rallies and product stays firm. Packer margins are week but with tight supplies and some reduction in work schedules keeps support under the market in livestock contracts.
Goldman roll starts today in CME livestock. They will be selling the nearby and buying a deferred contract.
Dressed beef values were higher with choice up 1.22 and select up .35. The CME Feeder Index is 158.82. Pork cutout values are up .39.
Markets At-A-Glance -- 5:15 AM
- May Corn 3
- May Beans 4
- May Wheat 4 3/4
- May Soymeal 1.20
- May Soy oil .10
- Mar Dlr .25
- Mar S&P -7.50
- Jun Crude .40
- Jun Gold .40
Technical Chart of the Day
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