Soybean Profitability Suggests Impact on 2018 Plantings
Mar 15, 2018
Good Morning! From Allendale, Inc. with the early morning commentary for March 15, 2018.
Grain market traders are dealing with increased volatility due to South American weather, possible tariff retaliation and technical chart points. After yesterday’s close, the soybean complex held last week’s lows (important chart support). Trade will be looking at rainfall reports out of Argentina and export sales data to help them decide how they want to be positioned going into the weekend.
Allendale’s acreage survey of farmers suggest a total corn planted area of 88.514 million acres and 92.104 million planted acres to soybeans in 2018. USDA outlook meeting in February had corn and soybean planted acres at 90.0 million acres each.
World Weather Inc. says, “Two rain events will still occur in Argentina in the next five days. The first one occurred last night into today and will promote the most significant moisture in east-central and northeastern production areas, including Chaco as well. The second rain event will occur Saturday through Sunday and promote some of the most significant moisture in the southern half of Argentina’s production region.”
Weekly export sales report release is due at 7:30. Trade estimates are: corn 1,300,000 to 1,700,000 tonnes, soybeans 800,000 to 1,200,000 tonnes, soymeal 100,000 to 350,000 tonnes, 15,000 to 35,000 tonnes and wheat 250,000 to 500,000 tonnes.
NOPA Crush data will be released at 11:00 today. Trade is expecting 149.443 million bushels, which is 4.7% over last year. USDA just raised their whole-year crush estimate by 10 million bushels to now 1.960 billion which would be 3.1% over last year.
Weekly ethanol production was 1.025 million barrels per day last week which was down from the previous week’s 1.057 million barrels per day. Last week’s production level was 1.9% below year ago. USDA’s target for the year is 2.6% above last year.
Funds were estimated to have been net sellers of 8,000 contracts of corn and 13,000 contracts of soybeans. They were thought to have net buyers of 3,000 wheat contracts on Wednesday.
Cash bids at Midwest river terminals improved slightly yesterday as water levels goes down and barge shipping cost decline. Farmer selling was light.
Allendale Inc.’s Annual Planted Acreage Survey was released yesterday. Click here to view all the details of the survey in a webinar format.
Trump administration is pressing China to cut its trade surplus with the United States by $100 billion, a White House spokeswoman said, clarifying a tweet last week from President Donald Trump. (Reuters)
Goldman Sachs said it continues to expect broad weakness in the U.S. dollar and outperformance by emerging market currencies in 2018 amid investors' concerns about escalating trade tension. (Reuters)
Spreading livestock futures were the focus on Wednesday. Cattle traders were buying the April selling the June contract. The strong cash trade was the major catalyst for the strength in the April contract. Lean hog futures traders focused on bear spreading, selling the April contract buying the June. Weak cash hog prices, with more than adequate supplies have been applying pressure on the nearby contract.
April live cattle futures rallied early in the session, testing the 50-day and 20-day moving averages, only to close near session lows. The recent trading range has widened with resistance at 124.30 and support at 120.75.
April lean hogs closed near session lows on Wednesday. Technical support remains near 66.40 with resistance at 68.75.
Dressed beef values were higher with choice up .38 and select up .26. The CME Feeder Index is 143.25. Pork cutout value is down 2.34.