Traders Consider Next Move
Mar 17, 2017
Good Morning! Paul Georgy with the early morning commentary for March 17, 2017.
Happy Saint Patrick's Day! Grain markets are mixed as traders look to technical levels awaiting new fundamental news. Traders continue to watch the US dollar direction for an impact on exports.
NOAA's long-term weather forecasts, updated yesterday, show motley above normal temperatures for the majority of the cornbelt, and average precipitation. The forecasts covered both spring and summer.
Weekly export sales dated March 2 - 9 reported corn sales at 1,473,492 metric tonnes (1,255,423 2016/17 crop). That is the best sale for old and new crop combined in 13 weeks. It was over the 700,000 - 1,200,000 trade expectation. To date, we have sold 80% of USDA's whole-year expectation.
Soybean sales ran 697,360 metric tonnes (471,572 2016/17). Officially we have sold 97% of USDA's whole-year export expectation, over the 92% five year average.
Wheat export sales totaled 338,649 metric tonnes in the latest week (264,449 metric tonnes), the lowest weekly sales in eight years. This was within the 275,000 - 650,000 trade expectation. We have sold 92% of USDA's whole-year expectation, under the five year average of 95%.
February's crop insurance corn price was $3.96. In every year since the current commodity era began, 2006, we have always had a chance to sell corn at higher prices before harvest. The minimum rally over that price was 8 cents. In the seven years of moderate rallies they averaged 42 cents over the Feb average. The minimum time over that price was 14 days.
Chinese crush margins have fallen dramatically in recent days. We now down to a gross crush margin that is now negative. It reads -95 yuan per metric tonne. That is the lowest reading since August.
Managed money funds were estimated buyers of 6,000 corn contracts, 2,500 soybeans, 500 wheat, and 1,500 soymeal. Traders estimate they sold 500 soyoil.
The economic calendar is light today with Industrial Production out at 8:15 AM CDT, and Michigan Sentiment out at 9:00 AM.
Bird flu continues to spread, with another case reported in Tennessee. At this time, wide-scale bans are not anticipated, but the situation needs to continue to be monitored.
Cash hogs are off $7 since the peak on the 20th. Cash pork is $3 lower since that point. Continued moderate weakness is possible.
Cash cattle traded in Texas at $128 yesterday, an improvement over Wednesday's limited $127. It also puts them more inline with the active Nebraska trade that ran from $127 - $131.50.
Rich Nelson paid special interest to yesterday's cattle trade, "Futures gapped higher today (April 12 cents, June 22 cents, August 10 cents) and kept on going. The current trading philosophy among all sectors is to assume bulls are in control...until they are not. In other words, when boxed beef turns we can start discussing weakness for futures."
Cattle on Feed will be released next Friday at 2:00 PM CDT. Expect estimates early next week.
Dressed beef values were higher with choice up 1.04 and select up .73. The CME Feeder Index is 128.22. Pork cutout value is down .84.
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