Stocks Roll on While Grains Wait for USDA
Jan 10, 2018
Good Morning! From Allendale, Inc. with the early morning commentary for January 10, 2018.
Allendale’s 30th Annual Outlook Series is just two weeks away! Allendale will cover all major fundamental factors influencing corn, soybeans, and wheat pricing. We'll also include a special discussion on corn yield and explore why analyst estimates varied so greatly from USDA. For the producers we will provide specific strategies you will be able to put into action. Register Here.
Grain Markets are consolidating ahead of Report Friday. US stock indexes continue their uptrend and crude moves higher.
Trade Average estimates for US corn and soybean 2017 production are very near the USDA’s November estimates.
Quarterly Grain Stocks are estimated at 1.849 billion bushels for wheat, 12.431 for corn, and 3.181 for soybeans according to a Reuters poll. Corn would set a new Dec 1 record number should the estimate be realized.
US Ending Stocks for the January Supply and Demand report are estimated at .959 billion bushels for wheat, 2.431 billion bushels for corn, and .472 billion bushels for soybeans. Allendale’s Rich Nelson suggests ending stocks for soybeans could reach .500 billion due to the poor export sales pace.
Winter wheat seedings are estimated at 31.107 million acres. Of that total, analysts predict 22.327 million acres of hard red wheat, 5.555 MA of soft red wheat, and 3.435 MA of white wheat. Total acres could be as much as 1.5 million acres less than last year.
CONAB, Brazil’s Agriculture Agency will release production estimates on Thursday morning.
Open Interest has been building in recent sessions in corn and soybeans suggesting new hedge pressure offset by commercial or end-user buying. The increase in open interest before this Friday's major reports suggests traders are preparing for post report volatility.
Brazil’s soybean harvest is underway in Moto Grosso and Parana should begin next week in the western areas. Yields are normal for early harvest soybeans.
Crop conditions remain favorable in Brazil, some areas in Argentina are dry but crops are holding on with weekend rains.
Funds were estimated to have been net buyers of 4,500 contracts on Tuesday and 4,000 wheat contracts. They were thought to have net sellers of 3,000 soybean contracts.
Goldman Roll has been the reason for large volume and open interest changes in live cattle futures. Today is the 3rd day of the 5 day process of sell February cattle buying a deferred contract.
Fed Cattle Exchange has 711 head being offered this morning. Sale starts at 10:00 am CST. Packers bought cattle at 119 to 120 on Monday afternoon.
February Live Cattle futures made new lows for the recent decline and were able to close higher on Tuesday. The current discount of futures to cash is an incentive to move cattle to market and keep feedlots current. First line of resistance comes in at 118.15 and then at chart gap of 119.25.
February lean hog futures set new contract highs on Tuesday and closed at a new high price. Support crosses at 71.00 level. However, remember bear markets do make new contract highs.
Dressed beef values were higher with choice up .29 and select up .32. The CME Feeder Index is 152.42. Pork cutout value is up 1.11.
If you have any questions on any of our content, give us a call at 800-262-7538 or email@example.com