Technicals Present Heavy Picture For Grains
Jun 07, 2018
Good Morning! From Allendale, Inc. with the early morning commentary for June 7, 2018.
Grain markets are nervously waiting for the next shoe to drop. Will it be a change in weather forecast for the Midwest, retaliation by country buying US product or another move by Washington. USDA June S&D will be release next Tuesday.
Rich Nelson, Allendale Chief Strategist, discusses the soybean crop ratings. View the FREE webinar here.
Weekly Export sales report will be released at 7:30 am today. Trade estimates are: wheat, old crop (300,000 – (100,000), new crop 250,000 to 450,000 mt. Corn old crop 600,000 to 900,000 mt. Soybeans old crop 200,000 to 500,000 mt., soymeal old crop 50,000 to 350,000 mt., new crop 0 -100,000 mt. Soyoil old crop 5,000 to 25,000 mt., new crop 0 – 8,000.
USDA’s June Supply and Demand report will be released on Tuesday June 12 at 11:00 am CDT. Bloomberg’s survey of analyst suggests a lower corn stocks at 1.652 billion bushel, an increase in soybean stocks to 440 million bushel and wheat stocks coming in near unchanged.
Funds were estimated to be net sellers of 16,500 corn, 5,500 soybean, 2,500 soymeal and 2,500 soyoil yesterday. They were net buyers of 8,000 wheat.
President Donald Trump is not backing down from the tough line he has taken on trade, the White House's top economic adviser said on Wednesday, setting the stage for a showdown with top allies at this week's G7 summit in Canada. (Reuters)
Weekly ethanol production last week was unchanged from the previous week at 1.041 million barrels per day. That was 4.2% over last year and year to date pace is still 2.3% over last year, which is just below USDA’s balance sheet estimate of a 2.6% increase in corn for ethanol.
Brazilian soybean producers have so far sold 73 percent of the record 2017-18 crop, far ahead of sales at this period last season as a weaker local currency boosts revenue denominated in reais and stimulates trading activity. According to a report from agricultural consultancy Datagro, sales at this time a year ago were only at 61 percent, while the five-year average shows sales at 70 percent. (Reuters)
Fed Cattle Exchange had 568 head offered for sale on Wednesday auction, no cattle sold. Packers still expected to pay up for cattle due to their positive profit margins and wanting to keep chains running at capacity. However, we are getting close to the time when retailers are finished buying for the holiday (July 4th). Then comes a weak demand period for beef until early August.
No deliveries against the June live cattle futures however the oldest moved up to October 26, 2017.
June cattle futures rallied on Wednesday taken out and closing above chart resistance however the rally stalled at the 100-day moving average. Resistance comes in at 110.27 and support at 104.50.
Cash hog prices continue to grind higher as many producers are attending the World Pork Expo.
Technical buying has been a support to lean hog futures. Funds have been holding a net short position in lean hogs. Tariffs on pork by Mexico and the possibility from other countries are creating nervous trading conditions. July futures contract down trend resistance line crosses near 80.00. A close above that level could be a signal of a trend change.
Dressed beef values were lower with choice down .61 and select down 2.20. The CME Feeder Index is 139.21. Pork cutout value is down .29.