Traders React to Data Surprises
Aug 11, 2017
Good Morning! From Allendale, Inc. with the early morning commentary for August 11, 2017.
Grain markets continue to react to yesterday's USDA/FSA data release. Markets continue to monitor the North Korea situation as President Trump is not dialing-down his tough talk.
Supply & Demand numbers held a few surprises yesterday morning. The USDA dropped corn yield to 169.5, down from 170.7. New crop yields were lowered from 170.7 bpa to 169.5. Soybean yield was actually raised to 49.4 bpa from last month's 48.0. Both corn and soybean yields were a surprise.
Ending stocks for corn were left unchanged in old crop at 2.370 billion bushels, while new crop was lowered to 2.273 from last month's 2.325 in new crop. Old crop soybean ending stocks were lowered to .370 billion bushels on increased export sales. New crop soybeans ending stocks were increased to .475 on the higher yield/production estimate. Old crop wheat was left unchanged at 1.184, and new crop was lowered to .933 billion bushels.
World Numbers had new crop corn ending stocks at 200.87 million tonnes, soybeans 97.78, and wheat at 264.69. With the Supply and Demand report out of the way, traders will turn their attention to the private crop surveys. Allendale's own survey will run the 16th through the 30th. We hope you'll be able to take part.
FAS Preventive Plant data out yesterday afternoon reports corn acres not planted at 950,000. Last year's August number was 1,059,000. Soybean acres were 437,000 up from last years 237,000. Wheat acres were 614,000, down from last years 1,780,000.
Weekly export sales for the week ending August 3rd reported combined corn sales of 680,459 metric tonnes (52,017 old 628,442 new). That was within the 400,000 - 900,000 trade expectation.
Soybean export sales combined for 684,335 metric tonnes (45,013 old 639,322 new), within the trade estimate of 350,000 to 750,000 tonnes. Shipments through August 8 total 2.036 billion.
Wheat export sales totaled 464,277 metric tonnes (all current crop). That was just over the 250,000 - 450,000 trade expectation. Wheat is still in the early part of its marketing year that started on June 1. Total year to date sales run 387 million.
Managed money funds were thought to be very active sellers in yesterdays trade. Traders estimate they sold 32,500 corn, 16,000 soybeans, 11,000 wheat, 8,000 soymeal, and 4,500 soyoil.
CPI and Core CPI are both out this morning at 7:30 AM CDT and are the only major economic reports of the day. Instead, traders will again focus on the rhetoric between Present Trump and North Korea.
USDA raised their third-quarter beef production estimate up from 6.815 billion pounds to 6.830. Fourth-quarter numbers were up from 6.970 billion last month to now 7.165. This new number is 8.2% over last year.
USDA reiterated their very large 7.000 billion pound record pork production estimate for the fourth-quarter. That is 5.3% over last year.
Weekly pork export sales totaled 18,912 metric tonnes, a slightly positive number. That was 9% over last year's sale in the same week. That marks five weeks in a row over last year. Year to date sales are 8.6% over last year.
Cattle margins will be reduced effective with today's close. Initial margin will be reduced from $4,263 to $3,520 and maintenance margin will be reduced from $3,875 to $3,200 for feeder cattle. Live cattle initial margin will be reduced from $2,255 to $1,975 and maintenance will be reduced from $2,050 to $1,750.
Dressed beef values were lower with choice down 1.03 and select down .42. The CME Feeder Index is 147.93. Pork cutout value is up .11.
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