Strong Fund Short-Covering Push Markets Higher Before G-20
Nov 29, 2018
Good Morning from Allendale, Inc. with the early morning commentary for November 29, 2018.
Grain Markets pushed sharply higher as traders become more optimistic progress will be made at the G20 summit this weekend at the Trump-Xi meeting to end the current trade dispute. Funds were short covering as well to minimize their short positions.
USDA Weekly Export Sales Report will be released this morning at 7:30 am. Trade is expecting corn sales between 400,000 to 950,000 tonnes, soybean sales between 400,000 to 900,000 tonnes, wheat sales between 250,000 to 500,000, Soymeal between 175,000 to 400,000 and soyoil from 8,000 to 30,000.
First Notice for December contracts is tomorrow. Long position holders will need to be out of their positions by the close today or risk delivery.
Managed Money Funds were estimated buyers of 18,000 corn contracts, 8,000 soybeans, 5,000 wheat, 3,000 soymeal, and 5,500 soyoil in yesterday's trade.
Ukraine’s Agriculture Minister, Maksym Martyniuk said the imposition of martial law is not affecting Ukrainian grain shipments from ports on the Azov Sea so far and if necessary they can be diverted to the Black Sea. When asked if the start of martial law had had an impact on grain exports, Martyniuk said: "Not yet."
Ukrainian Grain Exports reached 17.6 million tonnes so far for the 2018/2019 season versus 16.4 million by the same point of the previous season. Ukraine has said it plans to harvest 68 million tonnes of grain this year versus 61.3 million last year. Ukraine has exported 5.2 million tonnes of corn compared to 2.9 million tonnes last season, while wheat shipments dropped to 9 million tonnes from 9.6 million last season, the agriculture ministry said.
EIA Petroleum Data Report showed crude oil stocks rose 3.58 million barrels to 450.49 million barrels (446.91 last week, 453.71 last year and 466.00 3-year average). Gasoline stocks dropped to 224.55 million barrels (225.32 last week, 214.10 last year and 218.99 3-year average) and distillate stocks jumped to 121.80 million barrels (119.19 last week, 127.78 last year and 141.11 3-year average).
Australia is forecasting a hotter-than-average summer, threatening one the world's largest cattle industries and stoking the risk of significant bushfires according to the weather bureau. The climate outlook puts a lot of pressure on Australia's cattle industry, which has been forced to slaughter animals in near record numbers over the last couple of months after scorching weather wilted pastures and dried dams. The slaughter increase comes as Australia's cattle industry is still battling to rebuild herds after the strongest El Nino in nearly 20 years saw the national herd fall to a three-decade low in 2016. (Reuters)
Dressed Beef Values were mixed with choice down 0.72 and select down 1.74. The CME Feeder Index is at 147.91. Pork cutout value was down .53.