USDA Confirms Poor Wheat Crop
Apr 03, 2018
Good Morning! From Allendale, Inc. with the early morning commentary for April 3, 2018.
Grain markets have their focus on US wheat weather forecasts as USDA confirms a rough looking US Winter Wheat crop. Concerns over trade issues with China persist in all markets.
Weekly Crop Progress officially started up for the year with yesterday's release. The USDA reported winter wheat as 32% good to excellent. Analysts were not polled for this release, but it is well below November's 50%, and last years 51% at this same time.
February Crush was reported at 4.95 million tons by USDA yesterday. 433.6 million bushels of corn were used for fuel alcohol, and 1.829 million tons of DDGS were produced.
Brazil has shipped a record number of soybeans in March, amid a bumper harvest and the highest domestic price in past five years. Soybean cash prices in Brazil have increased by nearly 10% since February. Current cash prices are at the highest level in recent five years and up approximately 15% from the same period of last year. Meanwhile, favorable weather during the growing season has resulted in record soybean production. The abundant supply, encouraging prices and recent US-China trade conflict have stimulated and will continue to boost Brazil soybean exports. (Reuters)
Renewable fuel credit prices are down 35.7% in 2018 as uncertainty over the Renewable Fuel Standard adds pressure. This represents the largest quarterly drop in a year.
Export inspections were reported yesterday morning by the USDA, and had 1,348,992 tonnes of corn, 361,723, 542,434 tonnes of soybeans. All three numbers were within the range of analyst estimates.
Managed money funds were estimated buyers of 3,500 corn contracts in yesterday's trade. They were sellers of 8,000 soybeans, 3,500 wheat, and 5,000 soymeal. They were neutral in soyoil.
China is moving forward with its plan to retaliate against the Trump administration's new tariffs on steel and aluminum, levying duties that took effect yesterday on more than $3 billion in U.S. exports to the country. That means a 15 percent tariff increase on products such as fresh fruit, dried fruits and nuts, wine, modified ethanol and American ginseng. Pork and a few other American goods will face a 25 percent tariff increase according to Politico.
Hog futures were limit down on the June contract yesterday. That means $4.50 limits today. Traders were concerned over the trade war with China.
CME Group is raising the margin required to hold one lean hog future from $1,000 to $1,200 per contract effective with today's close.
Cattle showlist numbers were 6,600 head higher over last week. Analysts suggest this is the start of the seasonal supply increase. This year's increase in April, May, and June will be quite large due to those heavy Sep - Nov placements.
Dressed beef values were mixed with choice down 1.24 and select up 1.81. The CME Feeder Index is 135.06. Pork cutout value is up .54.
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