Technical Picture Becomes Fear Factor
May 31, 2018
Grain markets are becoming concerned about chart patterns which have fallen below key moving averages. Weather forecasts are putting above normal temps in the long-range outlook. Any comments out of Washington or Beijing could provide a sharp move. Trade negotiations and outcomes are very important to grain prices this year.
Weekly export sales report will be released tomorrow morning due to the holiday this past Monday.
Funds were estimated net sellers of 24,000 corn contracts, 6,500 soybeans, 9,000 wheat and 4,000 soymeal. They were net buyers of 2,500 soyoil.
USDA attaché in Argentina says the 2018 drought has local brokers expecting 4 to 5.5 mmt of soybean imports this year to keep normal processing levels.
Brazil’s trucker strike and work stoppage has hit many sectors of their economy. One of the hardest hits is the poultry industry where it is estimated that 24 million birds are lost per day if all truckers don’t get to work.
Brazil’s Ag Minister, Maggi says shipping and poultry industries will need some type of rescue package to help them with their losses.
72-hour strike by Brazilian oil workers halted refineries and rigs on Wednesday, union leaders said, a new blow to President Michel Temer on the heels of a trucker protest that has strangled Latin America's largest economy for over a week. (Reuters)
Senior North Korean official made a rare visit to the United States on Wednesday for talks about a possible summit between the leaders of the two countries but the sides appeared far apart on the central issue of Pyongyang's nuclear weapons. (Reuters)
EIA will release crude oil stocks and ethanol production data at 9:30 this morning.
Fed cattle exchange had 225 head of cattle sell at 110.00 which support short covering in the futures market. There have been some reported sales at 108.00 before the electronic auction. Packer margins remain near record levels as retailers restock shelves for first of month featuring and Father’s Day (a good beef demand weekend) only a few weeks away.
Hot weather in the cattle feeding areas is a double edge sword. Cattle are not gaining as quickly but feedlot managers are moving market ready cattle early before death loss rises due to heat.
Live cattle futures will have a 4.50 limit today after the Jun and August contracts closed limit bid on Wednesday.
June live cattle futures have resistance at 108.00 and support at 102.97. Look for choppy trade as we move into a slow demand period.
Cash hogs are in a seasonal period where supplies should tighten and weights should drop. However, the supply of protein meats is plentiful and will create completion at retail counter.
July lean hog futures closed above the down trend resistance line on Wednesday. Nest level of resistance is 81.32 with support 78.90.
Dressed beef values were higher with choice up 1.12 and select up .73. The CME Feeder Index is 134.86. Pork cutout value is down .29.