Trade Agreement Resolutions Will Need More Time
May 03, 2018
Good Morning! From Allendale, Inc. with the early morning commentary for May 3, 2018.
Grain markets are dealing with rains across cornbelt. Some will be viewing the moisture as potential planting delays which should be friendly. While others view the moisture as helpful to the row crops that have been planted. The bigger picture of money flow, decisions on Chinese tariffs, NAFTA trade agreement talks and Trump’s decision on the Iran Nuclear deal will likely influence grain price in the short-term.
USDA Weekly Export sales report release is at 7:30 this morning. Trade is estimating 2017-18 corn at 700,000 to 1,000,000 tonnes, soybeans 300,000 to 600,000 tonnes, soymeal 150,000 to 350,000 tonnes, soyoil 8,000 to 25,000 tonnes and wheat 0 to 30,000 tonnes. Trade estimates for the 2018-19 marketing year are: corn -50,000 to 150,000 tonnes, soybeans 150,000 to 350,000 tonnes and wheat 100,000 to 300,000 tonnes.
Weekly ethanol production ran 1.032 million barrels per day in the latest week. That was 4.7% over last year. Year to date production is 2.2% over last year. USDA’s current goal for the year is 2.6% over last year. We are a little behind our needed pace, but USDA may not be ready to lower their corn for ethanol number on the May Sand D report on May 10th. There is enough fluctuation in corn for ethanol efficiency rates for them to put this off.
Funds were thought to have been net sellers of 5,500 corn contracts, 8,500 soybeans, 4,500 wheat and 4,500 soymeal on Wednesday. They were net buyers of 4,000 soyoil.
Brazil's Trade Ministry published its export data for the month of April. Brazil exported 10.26 mmt of soybeans during April vs 8.81 mmt in March and 10.43 mmt a year ago. They exported 1.55 mmt of soy meal vs 1.32 mmt in March and 1.33 mmt a year ago.
The Trump administration has invited a group of U.S. senators to the White House early next week to discuss biofuels policy, the latest in a series of such meetings aimed at helping refiners cope with the Renewable Fuel Standard, according to two sources familiar with the matter. (Reuters)
Fed Cattle Exchange sold 413 head at a weighted average of $122.40 out of the 2,982 head that were offered at Wednesday's auction. There have been a few cattle traded in the country, but most feedlots are holding out for higher prices. The packer needs cattle to fill their aggressive retail demand during Beef Month.
June live cattle futures did not help the bulls out on Wednesday by opening higher and closing lower. Traders are looking ahead to the Goldman Roll which is only a few days away. Technical indicators suggest an overbought condition in June cattle futures and key chart support is 103.82. A close below that level could be followed by more selling pressure.
Cash hog prices are slowly working higher as pork product firms up. Futures traders struggle with the premium of futures to cash.
June lean hog futures have consolidated in a tight trading range which suggests the markets needs a close above resistance of 74.80 or below support at 72.20. A breakout of this range could push prices sharply in the direction of the move.
Dressed beef values were higher with choice up .87 and select up .79. The CME Feeder Index is 139.13. Pork cutout value is up 1.09.
If you have any questions on any of our content, give us a call at 800-262-7538 or email@example.com